3 June 2024
Triple
Point Venture VCT Plc
(the
"Company")
RESULTS
FOR THE YEAR ENDED 29 FEBRUARY 2024
The financial information set out
in these statements does not constitute the Company's statutory
accounts for the year ended 29 February 2024, prepared in
accordance with section 435 of the Companies Act 2006, but is
derived from those accounts. Statutory accounts will be
delivered to the Registrar of Companies in due course. The
auditors have reported on these accounts and their report was
unqualified and did not contain a statement under section 498(2) of
the Companies Act 2006.
Results
Triple Point Venture VCT
plc managed by Triple Point Investment Management LLP today
announces the results for the year ended 29 February
2024.
These results were approved by the
Board of Directors on 31 May 2024.
You may view the Annual Report in
due course on the Triple Point
website www.triplepoint.co.uk. Please
note that page numbers in this announcement are in reference to the
Annual Report.
FOR FURTHER INFORMATION ON THE COMPANY, PLEASE
CONTACT
Triple Point Investment Management
LLP
(Investment Manager)
|
Tel: 020 7201 8989
|
Ian
McLennan
Jack Rose
|
|
The Company's LEI is
213800AOOAQA5XQDEA89
Further information on the Company
can be found on its website https://www.triplepoint.co.uk/current-vcts/triple-point-venture-vct-plc/s2539/
NOTES:
The Company is a Venture Capital
Trust incorporated in July 2010 and was established to fund small
and medium sized enterprises. The Investment Manager is Triple
Point Investment Management LLP.
Financial
Summary
Year ended 29 February 2024
|
|
|
|
|
|
|
|
|
A Shares
|
B Shares
|
Venture
Shares
|
|
Total
|
Net
assets
|
£'000
|
-
|
-
|
62,196
|
|
62,196
|
Net
asset value per share
|
Pence
|
-
|
-
|
98.55
|
|
|
(Loss)
before tax
|
£'000
|
-
|
-
|
(785)
|
|
(785)
|
(Loss)
per share
|
Pence
|
-
|
-
|
(1.46)
|
|
|
|
|
|
|
|
|
|
Cumulative return to
Shareholders (p)
|
|
|
|
|
|
Net
asset value per share
|
|
-
|
-
|
98.55
|
|
|
Total
dividends paid
|
|
-
|
-
|
11.00
|
|
|
Net
asset value plus dividends paid (Total Return)[1]
|
|
-
|
-
|
109.55
|
|
|
Year ended 28 February
2023
|
|
|
|
|
|
|
|
|
A
Shares
|
B
Shares
|
Venture Shares
|
|
Total
|
Net
assets
|
£'000
|
94
|
69
|
43,654
|
|
43,817
|
Net
asset value per share (NAV)
|
Pence
|
1.00
|
1.00
|
102.17
|
|
|
Profit/(Loss) before tax
|
£'000
|
(275)
|
2,183
|
(3,273)
|
|
(1,365)
|
Earnings/(Loss) per share
|
Pence
|
(2.83)
|
32.31
|
(8.47)
|
|
|
|
|
|
|
|
|
|
Cumulative return to
Shareholders (p)
|
|
|
|
|
|
Net
asset value per share
|
|
1.00
|
1.00
|
102.17
|
|
|
Total
dividends paid/payable
|
|
115.92
|
99.00
|
9.00
|
|
|
Net
asset value plus dividends paid/payable (Total Return)
|
|
116.92
|
100.00
|
111.17
|
|
|
Triple Point Venture VCT plc ("the
Company" or "TPV") is a Venture Capital Trust ("VCT"). The
Investment Manager is Triple Point Investment Management LLP
("TPIM" or "Triple Point"). The Company was incorporated in July
2010.
During the year ended 29 February
2024, the Company issued a total of 20,200,780 new Venture shares,
raising gross proceeds of £20.7 million with an average price per
share of £1.03. Additionally, a Dividend Reinvestment Scheme
("DRIS") on 4 September 2023 saw a further 210,732 shares issued at
an average price of £0.95. A total of 18,138 Venture Shares were
repurchased by the Company for cancellation during the year, at a
price of 5% discount to NAV.
The period under review included the wind down and cancellation
of the A and B Share Classes, as approved by Shareholders at the
Company's general meeting held on 9 February 2023 and the A and B
Share Class meetings held on 1 March 2023. The cancellations were
effective on 30 March 2023, and all funds including nominal capital
have now been returned to the A and B Share Class
Shareholders.
The Strategic Report on pages 4 to
42 the Directors' Report on pages 62 to 65, the Corporate
Governance Report on pages 43 to 52 and the Directors' Remuneration
Report on pages 57 to 61 have each been drawn up in accordance with
the requirements of English law and liability in respect thereof is
also governed by English law. In particular, the responsibility of
the Directors for these reports is owed solely to Triple Point
Venture VCT plc.
The Directors submit to the
members their Annual Report and Financial Statements for the
Company for the year ended 29 February 2024 ("Annual
Report").
Key
Highlights
As at 29 February
2024
· Dividend per Venture Share paid during the year ended 29
February 2024[2]: 2.00p (Year ended 28 Feb
2023: 3.00p).
· Ongoing Charges Ratio[3]: 3:23%. The
ongoing charges ratio is a ratio of annualised ongoing charges
expressed as a percentage of average net asset values throughout
the year (2023: 3.21%).
· Net
Asset Value per Venture Share: 98.55p (Year ended 28 Feb 2023:
102.17p).
· Total Return per Venture Share: 109.55p(Year ended 28 Feb
2023:111.17p).
· Total funds deployed during the year: £11.9 million (2023:
£11.4 million).
· Fundraising: £20.2 million (Year ended 28 Feb 2023: £18.3
million).
Strategic Report - Chair's
Statement
I am pleased to present the Annual
Report and Audited Financial Statements for the Company for the
year ended 29 February 2024.
The Company now has a single share
class (the "Venture Shares") investing in early-stage venture
opportunities. The portfolio has continued to grow and diversify,
with eight new qualifying investments made this year and
participation in 11 follow-on funding rounds with existing
portfolio companies at a total value of £11.9m. Further detail can
be found in the Investment Manager's Review on pages 26 to
32.
The Venture total return NAV per
share (plus cash dividends paid to Shareholders) has declined by
1.46% (from 111.17p to 109.55p) over the period since 28 February
2023, but has increased by 0.87% (108.61p to 109.55p) since 31
August 2023. The decline in the first half of the year in review
reflected a number of downward fair value adjustments for companies
that suffered from the mix of the more challenging macroeconomic
environment and the reduction in frequency of new venture equity
funding rounds. These downward adjustments outweighed several
portfolio companies with upward valuations resulting from good
commercial traction and successful new funding rounds. Later in the
year net portfolio performance improved, with more companies
raising capital at higher valuations, and it is this improved
performance that accounts for the marginal increase in total return
NAV since 31 August 2023. We continue to be confident in the
underlying growth prospects of our portfolio companies, and there
are signs that the more difficult period that many venture-backed
businesses faced in 2022-23 may be coming towards an end. The
Investment Manager's Review on pages 26 to 32 gives a more detailed
update on the Company's portfolio of 48 investments.
As at 29 February 2024, the
Company's assets were 71% invested in a portfolio of VCT Qualifying
and Non-Qualifying unquoted investments. 29% of the Company's
assets are currently held in money markets and cash. Over the last
year, the investment manager has opened accounts with three large
investment managers to manage the Company's uninvested cash in
lower risk liquidity funds.
Board Changes
The Board has undertaken a formal
succession and recruitment process, with the assistance of an
Independent external search consultancy Tyzack Partners Limited,
and we were pleased to welcome Sam Smith to the Board as
Independent Non-executive Director on 8 February 2024. Sam was also
appointed as Senior Independent Non-executive Director and member
of the Audit Committee with effect from the same date. Sam
undertook a formal induction process upon joining the Board. Sam's
biographical details can be found on page 44.
As announced on 8 February 2024, I
will not be standing for re-election at the Company's 2024 Annual
General Meeting ("AGM"), to be held on 23 July 2024, and will step
down from the Board following the conclusion of the AGM. I would
like to say thank you to the Board and Investment Manager for their
continued support and I am pleased to announce that Jamie Brooke
will be my successor as Non-executive Chair of the Board, to take
effect immediately following completion of the AGM. The three other
Directors will stand for re-election at the Company's
AGM.
Appointment of Triple Point Investment Management LLP as
AIFM
From 12 September 2023, the
Investment Manager was appointed as the Company's Alternative
Investment Fund Manager ("AIFM") and is now responsible for the
Company's risk management and portfolio management. Therefore, the
Investment Manager has full discretion under the Investment
Management Agreement to make investments in accordance with the
Company's Investment Policy from time to time. In addition, the
Company has appointed a depositary[4],
Indos Financial Limited, and their details can be found on page 99.
There are no changes to Triple Point's fees as a result of their
appointment as AIFM. Further details can be found in note
6.
Wind down of A Share Class and B Share
Classes
Following approval by
Shareholders, the process to wind down and cancel the A and B Share
Classes was undertaken. Court proceedings to wind down the A and B
Share Classes commenced on 8 March 2023, and the cancellations were
effective on 30 March 2023. These shares were subsequently removed
from the Official List of the Financial Conduct Authority ("FCA")
and from trading on the London Stock Exchange ("LSE") with effect
from 13 April 2023. All funds, including nominal capital, have now
been returned to the A and B Share Class Shareholders.
Venture Portfolio
This was the fifth year of our
Venture strategy. High interest rates,
energy prices and inflation continued to dominate the narrative in
the early part of this year. Those factors had contributed to a
more difficult funding environment for early-stage companies in
2022 and 2023, as a result of which founders entered the year
generally a little less optimistic when compared with previous
years.
The collapse of
Silicon Valley Bank ("SVB") in March 2023 caused
further shockwaves in the wider ventures market. SVB was a crucial provider of loans to start ups in the UK
as well as the USA. While a number of portfolio companies held
accounts with SVB UK, the prompt acquisition of SVB's UK business
by HSBC meant there was no impact on our investees' access to
liquidity. The Investment Manager worked with a number of portfolio
businesses to review their banking relationships,
which at that stressful time was, I know, much
appreciated.
A reduced number of exits in the
market since 2021/22 has meant a liquidity
crunch for some angel investors, and this has had a dampening
effect on the important "friends and family" funding network upon
which so many founders rely for their first funding rounds. More
trade sales would certainly benefit the seed-stage market by
recycling investment and maintaining inflow of angel cash.
Nevertheless, many companies selling software as a service ("SaaS")
are finding the funding they need as an increasing number of
investors seek the holy trinity of high gross margins, recurring
revenue and an impressive founding team.
In the second half of the year in
review, large cap tech shares rallied in the stock market, on the
back of optimism about the growth opportunities from Artificial
Intelligence ("AI") and the relative resilience of economies,
particularly the US, in the face of higher interest rates. An
additional boost was provided by forecasts and by markets beginning
to talk of a peak in interest rates. Perhaps not coincidentally, we
started to see more activity in our portfolio towards the end of
the year, with an increasing number of companies able to close
investment rounds at an uplift to previous company valuations even
while an acceptance of the need for more down-rounds has grown
among founders and investors. While it's still very early days, and
while getting deals done has not been as straight forward as it has
been in previous years, there are growing signs of the market
beginning to normalise. Start-ups with compelling founding teams
and business models can still raise funds at healthy valuations;
indeed, we have seen an increase in competition among Venture
Capitalists to fund the better opportunities. The Triple Point team
continues to think of new ways to gain a competitive edge within
the start-up community.
As we have previously stated,
companies failing is part and parcel of venture investing, yet
despite this tougher investment environment, of the
51 companies invested in by the Company to date,
only one portfolio, Anorak, company has completely failed. This is
testament to the focus that the investment team places on the
quality of the teams that we back and the continued support
provided to portfolio companies. No doubt there will be more
failures ahead but, despite being a young portfolio, our companies
have proven fairly resilient to the many shocks that came their way
in the years between 2020 and 2023.
As I
mentioned, the Triple Point team continued to be active during the
year, making a total of 19 investments, of which eight were
investments in new companies and 11 were follow-on investments in
existing portfolio companies. As expected, the number and
proportion of follow-on investments has increased with the size of
our portfolio. We do not back every portfolio company every time
they raise; we are selective, but of course our bias is to support
our businesses where they have delivered.
As far as sectors are
concerned, health-tech has performed well
with regards to valuation growth as investor interest remains
robust and growth opportunities plentiful. Scan.com raised a
further funding round and Pelago raised a $58m Series C funding
round. There is a further health-tech company in the portfolio that
is, at the time of writing, working to close a Series B round. In
the case of Scan.com, this was the second up-round since the
portfolio originally invested and was priced at a 1.9x share price
uplift to its prior funding round which closed just eight months
earlier. As a number of portfolio companies graduate through the
stages of Venture Capital funding, we expect to see an increase in
later funding rounds.
As already mentioned above, this has also been an exciting year
for AI, with a number of our portfolio companies adopting and
experimenting with Large Language Models ("LLMs"), not least to
enhance efficiencies and information around their existing core
software products. Please see the 'Outlook' section below for some
further thoughts on AI. We also had a strong performer in the
Energy Transition sector, with Modo, the all-in-one software
platform for battery energy storage analysis, raising funds at a
significantly higher valuation after showing strong revenue growth
and expanding into the US.
It has generally been a tougher year for Fintech, including
Insurtech; the portfolio suffered two significant down valuations,
one due to commercial poor performance and another as a result of
the founder deciding to quit due to exhaustion, leading to a quick
sale of the business, which the investment manager has been
supporting. We are well aware of the mental strain that starting
and growing a company can bring, and Triple Point actively does
what it can to support its companies in these, hopefully rare,
cases.
VCTs and our new offer
The overall VCT market itself
continues to be robust, with any doubts about the
continuation of the EIS and VCT tax relief
scheme beyond 2025 (when the current EIS/VCT "Sunset Clause" was
due to expire) now thankfully resolved following the enactment of
the Finance Act 2023, which extended the VCT tax reliefs until 6
April 2035. We should note that this is still pending EU Approval,
at the time of writing, which the UK Government thought it prudent
to obtain given the special status of Northern Ireland post Brexit.
Investors should remain aware that NAV volatility will remain, and
that investments may be impacted by trends in global venture
capital valuations as well as by the portfolio companies' own
underlying commercial performance.
The Company's fifth offer for subscription closed on 28 July 2023
having raised £14.6m and over the full year to 29 February 2024 the
Company raised £20.2m. The sixth offer for subscription opened in
September 2023 and I am pleased to report that it is progressing
well with a total of £0.8 million raised in March and £6.7 million
raised in April. We believe the recent fundraising puts the Company
in a strong financial position (see Liquidity section below on page
10).
The Venture Strategy's aim is to continue building a portfolio of
qualifying Investments in early-stage companies capable of
generating significant long-term capital growth with a focus on the
business-to-business technology sector, while enabling investors to
take advantage of the substantial tax reliefs available to
investors in VCTs, including 30% income tax relief on amounts
invested.
In line with the Company's key
objectives, a second interim dividend of 2 pence per share was
declared by the Company on 3 January 2024 and paid to Shareholders
on 18 March 2024, thus total dividends declared in the current
financial year were 4 pence per share, an increase of 33% from
2023, of which 2 pence per share was paid as at 29 February 2024.
The Board aims to declare further dividends in the year to February
2025, contingent on availability of distributable reserves and
realised gains. The VCT continues to target a dividend of 5 pence
per Share in the medium term, again contingent on the availability
of distributable reserves and realised gains.
A snapshot of the new companies
into which the Company has invested during the year is set out
below.
Portfolio Company
|
Investment Amount
£'000
|
Date of Investment
|
Location
|
Description
|
Modo Energy*
|
2,250
|
Mar-23
|
Birmingham
|
Modo Energy are building a global
data analytics platform for renewable energy assets.
|
Virtual Science
|
182
|
Mar-23
|
London
|
Virtual Science enables
international pharmaceutical companies to roll out hybrid advisory
boards across the world and analyse video and text feedback for
insights in days - rather than weeks with medical
writers.
|
Fertifa
|
1,000
|
Apr-23
|
London
|
Fertifa is an employer benefit
business that provides i) fertility & family forming, ii)
menopause and iii) men's reproductive health services to
employees.
|
Nory
|
1,527
|
May-23
|
Dublin
|
Nory provide AI-enabled software
for hospitality businesses to manage their business and restaurant
operations.
|
Tuza (formerly
Statement)
|
150
|
Jun-23
|
London
|
Tuza is a small/medium-sized
business ("SMB") payment provider switching service, being built to
capitalise on the fact that SMB overcharging is very common in the
card processing sector.
|
SeeChange
|
1,500
|
Sept-23
|
Manchester
|
SeeChange are building a
general-purpose recognition platform for real-world application of
computer vision (which is the analysis and understanding of digital
images) starting with use cases for retailers.
|
Heat Geek (formerly
Skoon)
|
1,000
|
Oct-23
|
London
|
Heat Geek is a heat pump installer
software that helps heat engineers install high-efficiency heat
pumps better and faster.
|
Abtrace
|
700
|
Nov-23
|
London
|
Abtrace is a population health
monitoring tool for primary care providers.
|
*The total investment into new
company Modo Energy during the year consists of an initial
investment on 3 March 2023 of £1,500,088 and a follow-on investment
of £749,996 on 26 October 2023.
Liquidity
The Company has sufficient
liquidity, predominantly from its fundraising, with cash and cash
equivalents totalling £18.2 million (29% of net asset value) at 29
February 2024. This means that the Company will be able to respond
quickly to new investment opportunities for the portfolio as they
arise.
Share Buy-Backs
We continue to maintain our aim,
subject to distributable reserves and liquidity, of being willing
to buy back the Company's Shares in the market at a 5% discount to
NAV.
During the year ended 29 February
2024, a total of 18,138 Venture Shares were repurchased by the
Company for cancellation at a 5% discount to NAV. The average
prices paid for the buy-back of Shares were as follows:
Date
|
Number of Venture
Shares
|
Average Price per Share
(£)
|
4 August 2023
|
6,958
|
0.95
|
3 November 2023
|
10,306
|
0.94
|
7 December 2023
|
874
|
0.93
|
These transactions represent 0.04%
of the opening issued Share capital of the Company.
VCT Qualifying Status
The Company has maintained its
approved venture capital trust status with HM Revenue &
Customs. The Company's compliance with the VCT-qualifying
conditions is closely monitored by the Board, who receive regular
reports from the Investment Manager and a report annually from our
VCT tax compliance advisers, Philip Hare & Associates
LLP.
VCT Legislation and Regulation
Following continuous dialogue with
HMRC, the VCT industry benefits from greater clarification around
the operation of the new VCT rules introduced in 2015. As a result,
the majority of investments are now made on the basis of
self-assuring their qualifying status, subject to the receipt of
professional advice from our Tax Advisers.
We will continue to work closely
with the Investment Manager to ensure the Company remains compliant
with the scheme rules.
Post Year End Update
Following the year-end, the
Company has allotted a further 8,130,242 Shares into the Venture
Strategy, raising additional net proceeds of £7.6 million for the
Company during March and April 2024. The offer will remain open
until 31 July 2024, unless fully subscribed at an earlier date.
Allotment Date
|
Shares
Allotted
|
Net Investment
(£)
|
5 March 2024
|
879,639
|
844,097
|
18 March 2024 (DRIS
payment)
|
241,772
|
n/a
|
2 April 2024
|
3,769,252
|
3,616,848
|
4 April 2024
|
1,954,264
|
1,875,258
|
5 April 2024
|
1,285,315
|
1,233,382
|
The Company has seen the
completion of two additional investments post year-end, both in
March 2024. The first was a follow-on investment in Tuza (formerly
Statement), which is an SMB payment provider switching service,
based in London, being built to capitalise on the fact that SMB
overcharging is very common in the card processing sector. The
second was an investment in Treefera. Treefera is a London based
forestry data company that aggregates global satellite data and
images to bring transparency, accuracy, and trust to carbon offset
projects and supply chains.
A two pence per share dividend was
declared in January 2024, and following the period end, was paid to
the Shareholders on 18 March 2024.
Outlook
While investment activity in UK
seed and growth companies was down on the previous year (in line
with international trends), a record number of companies were
incorporated in the UK in 2023, and the investment team continues
to identify compelling opportunities. Looking forward into 2024, we
continue to see considerable opportunities in AI, Climate tech,
software-enabled Biotech and Digital Health in
particular.
This year has seen significant
investment appetite for the transformative technology of AI. While
there has been a significant amount of hype, it does seem that we
are on the cusp of an internet-type moment; AI looks to
fundamentally transform our society and is already being widely
used in offices and homes. We expect this trend to continue, albeit
the rush of AI related start-ups may be followed by something of a
shake-out in 2025. The global push to reduce carbon means we would
equally expect to see continued innovation in the cleantech and
energy transition sectors - there is undoubtedly an urgent need for
sustainable solutions.
We are supportive of the growing
efforts to promote gender equality. More female founders are being
encouraged to enter the venture ecosystem and there is an
increasing number of accelerators, incubators and mentorship
programmes focused on female entrepreneurs. There are also a record
number of female scale ups in 2023, which are those that have
reached £10m+ of revenues and/or £5.2m assets as well as a record
number of women setting up new businesses. We are keen to back all
entrepreneurs with good businesses and encourage female founders to
speak to us. We believe that this can be only a positive. Towards
the end of the year in review a new investment was completed in
Treefera, a business that sports both a compelling cleantech
solution and a female co-founder.
As markets and businesses begin to
look towards the possibility of lower interest rates later in 2024,
we have already seen a normalisation and stabilisation in listed
sector SaaS valuations (as recognised by the
BVP
Cloud Index) which collapsed in
2022 and were steady in 2023. Add to that the bottom-up increase in
activity that we have seen within the Venture Strategy's own
portfolio, together with the innovation that Generative AI is
supporting, and we look to the coming year with more
confidence.
If you have any questions about
your investment, please do not hesitate to contact the Investment
Manager, Triple Point, on 020 7201 8990. I would like to take this
opportunity to thank Shareholders and the Investment Manager for
their continued support and I look forward to welcoming further
Shareholders during the months ahead.
Jane Owen
Chair
31 May 2024
Strategic Report - Company
Strategy and Business Model
The Strategic Report has been
prepared in accordance with the requirements of Section 414c of the
Companies Act 2006. Its purpose is to inform the members of the
Company and help them to assess how the Directors have performed
their duty to promote the success of the Company in accordance with
Section 172 of the Companies Act 2006.
The Directors assess the Company's
success in meeting its objectives in relation to returns,
stability, VCT qualification and realised exits.
Investment Policy
Investment
Objectives
The Company's Investment Policy is
directed towards new investments in businesses which have the
potential for high growth with the development or use of new
technology being at the core of the commercial opportunity. All
investments must provide the potential for a strong, positive,
risk-adjusted return to investors. All investments will be made
with the intention of growing and developing the revenues and
profitability of the target businesses.
The Company focuses on providing
funding to unquoted companies at an early stage in their lifecycle
to help them grow and scale. The Company will typically make
initial investments of between £100,000 and £2 million and may make
further follow-on investments into existing portfolio companies.
The intention is to build a portfolio of predominantly unquoted
companies with significant growth potential across a diversified
range of sectors.
The Company will not vary these
objectives to any material extent without the approval of the
Shareholders.
Target Asset Allocation
The Company aims to invest most of
its capital fully in VCT-Qualifying Investments. The long-term
investment profile of the Company is expected to be:
· at
least 80% in VCT-Qualifying Investments, with a focus on unquoted
companies with high growth potential; and
· a
maximum of 20% in permitted Non-Qualifying Investments, cash or
cash-based similar liquid investments.
Qualifying Investments
Investment decisions made must
adhere to HMRC's VCT qualification rules. In considering a
prospective investment in a company, particular regard is given
to:
· the
track record, expertise and ability of the management team with
clear commercial and financial objectives;
· a
significant, often global, total addressable market for the product
or service;
· the
ability of the company to create and sustain a competitive
advantage;
· the
quality of the company's assets, in particular where appropriate,
the ownership and effective use of proprietary technology and/or an
innovative product;
· the
high likelihood of a transformational corporate contract and
established market fit and then the opportunity to develop regular,
repeated income from new clients, leading to growth and long-term
profitability;
· a
high level of access to regular financial and other information
during the holding period;
· an
attractive valuation at the time of the investment;
· the
long-term prospect of being sold or listed in the future at a
significant multiple of the initial investment value;
and
· no
more than 10% of the NAV of the Company will be invested in
companies which are not revenue-generating (at the point of
investment) or where there is no expectation of revenues being
generated in the near future.
As the value of investments
increase, Triple Point will monitor opportunities for the Company
to realise capital gains to enable the Company to make tax-free
distributions to Shareholders.
Non-Qualifying Investments
The Non-Qualifying Investments
will be managed with the intention of generating a positive return.
The Non-Qualifying Investments will comprise from time to time a
variety of assets including (a) short-term deposits of money,
Shares or units in alternative investment funds (which have the
meaning given by regulation 3 of the Alternative Investment Fund
Managers Regulations 2013) or in undertakings for the collective
investment in transferable securities (which have the meaning given
by Section 363A(4) of the Taxation (International and Other
Provisions) Act 2010), which may be repurchased, redeemed, or paid
out on no more than seven days' notice; and (b) ordinary Shares or
securities in a company which are acquired on a regulated market
(defined in Section S274(4) ITA 2007).
Borrowing Powers
Any borrowing by the Company for
the purposes of making investments will be in accordance with the
Company's articles of association. To the extent that borrowing is
required, the Directors will restrict the borrowings of the Company
and exercise all voting and other rights or powers of control over
its subsidiary undertakings (if any) to ensure that the aggregate
amount of money borrowed by the Company, being the Company and any
subsidiary undertakings for the time being (excluding intra-Company
borrowings), will not, without Shareholder approval, exceed 30% of
its NAV at the time of any borrowing.
Risk Diversification
The Company aims to invest in a
number of different businesses within a variety of industry sectors
but may focus investments in a single sector where appropriate to
do so. No single investment by the Company will represent more than
15% of the aggregate NAV of the Company at the time the investment
is made.
Valuation Policy
All unquoted investments are
valued in accordance with International Private Equity &
Venture Capital (IPEV) or similar guidelines. A brief summary of
the IPEV guidelines as it applies to the Company's investments is
as follows:
· investments should be reported at fair value where this can
be reliably determined by the Board on the recommendation of the
Investment Manager;
· in
estimating fair value for an investment, the valuation methodology
applied should be the most appropriate for a particular investment.
Such methodologies, including the price of the recent investment,
revenue multiples, net assets, discounted cash flows or earnings
and industry valuation benchmarks, should be applied consistently.
The price of recent transactions should not be assumed and should
be calibrated against a scorecard or other appropriate
measures;
· where the valuation is based on the price of a recent
investment this may be adjusted to reflect subsequent business
performance and variations from expectations at the time of
investment.
Co-Investment Policy
The Company may invest alongside
other funds or entities managed or advised by the Investment
Manager which would help the Company to broaden its range of
investments or the scale of opportunities more than if it were
investing on its own.
It is possible that conflicts may
arise in these circumstances between different funds or between the
Company and the Investment Manager. The Investment Manager
maintains robust conflict of interest procedures to manage
potential conflicts and issues are resolved at the discretion of
the independent board of the Company.
Dividend Policy
The Company will distribute by way
of dividend, where there are sufficient
applicable reserves, such amount as ensures that it retains not
more than 15% of its income from shares and securities. The
Directors aim to maximise tax-free distributions to Shareholders of
income or realised gains. It is envisaged that the Company will
distribute most of its net income each year by way of dividend,
subject to liquidity.
The Company intends to distribute
regular dividends of up to 5 pence per share per annum in the
medium term. The Company's ability to pay dividends is subject to
the existence of realised profits, legislative requirements, and
the available cash reserves.
Share Buy-Back Policy
The Company aims, but is not
committed, to offer liquidity to Shareholders through buy-backs,
subject to the availability of distributable reserves, at a target
price of a 5% discount to NAV.
Share Realisation Policy
After an anticipated holding
period of between five and seven years, which may include follow-on
investments into investee companies as appropriate, Triple Point
will generally seek to identify opportunities to exit
investments.
Exits will typically be realised
through trade sales to businesses, acquisitions by private equity
funds, or selling shareholdings to later stage venture and growth
capital funds during the course of further investee company
fundraising activity. Sales during the course of further investee
company fundraising activity may include investee companies buying
back Shares at a price reflecting the valuation at that stage. The
proceeds of any realisation will be used to identify further
investment opportunities and to pay dividends to
investors.
Key Performance Indicators ("KPIs")
As a VCT, the Company's objectives
are to provide Shareholders with up front tax relief and returns
through capital appreciation and the payment of dividends. The
Company aims to meet these criteria by investing its funds in line
with the Company's investment policy, more detail of which can be
found on pages 14 to 15.
The Board expects the Investment
Manager to deliver a performance which meets the objectives of
providing investors with an attractive income and capital return.
The Board has identified four primary KPIs, which are total return,
Net Asset Value per Share, earnings per Share and ongoing charges
ratio, that it uses in its own assessment of the Company's
performance, set out below. Of these KPIs, total return and ongoing
charges ratio are classified as Alternative Performance Measures
and are detailed further under Alternative Performance Measures at
the end of this report.
These are intended to provide
Shareholders with sufficient information to assess how the Company
has performed against its objectives in the year to 29 February
2024, and over the longer term, through the application of its
investment and other principal policies.
KPI AND DEFINITION
|
RELEVANCE TO STRATEGY
|
PERFORMANCE
|
COMMENT
|
|
|
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1. Total return (%)5
|
|
|
The change in NAV in the period
and dividends paid per share in the period.
|
The total return highlights the
underlying performance of the portfolio's investment valuations,
including dividends paid.
|
(1.46%) year to 29 February 2024
(2023: (7.01%))
|
The negative total return is due
to the decrease in the NAV per share of the Company. Which as
described below, is due to an increase in NAV based fees as a
result of the increasing capital base of the Company.
The Company did pay interim
dividends of 2.0 pence per share during the period, taking total
dividends paid by the Company to 11.0 pence per share at the year
end.
|
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2. Earnings per share (pence)
|
|
|
The post-tax earnings attributable
to shareholders divided by weighted average number of shares in
issue over the period.
|
The EPS reflects the Company's
ability to generate earnings from its investments, including
valuation increases.
|
The Venture Shares made a loss of
1.46 pence per Share for the year (2023: 8.47).
|
The main driver in the loss per
share for the year was costs incurred during the period. The
valuation of the Company's investment portfolio remained flat with
a moderate increase, but this was not sufficient to offset the
increased costs incurred during the year.
|
|
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3. NAV per share (pence)
|
|
|
|
NAV divided by number of shares
outstanding as at the period end.
|
The NAV per share reflects our
ability to grow the portfolio and to add value to it throughout the
life cycle of our assets.
|
The NAV per share as at 29
February 2024 was 98.55p (2023: 102.17p).
|
The NAV per share fell as a result
of the costs incurred during the period. The valuation of the
Company's investment portfolio remained broadly flat with a
moderate increase, but this was not sufficient to offset the costs
incurred during the year.
|
|
|
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4. Ongoing Charges Ratio[5]
|
|
|
Annualised ongoing charges are the
Company's management fee and all other operating expenses (i.e.
excluding acquisition costs and other non-recurring items)
expressed as a percentage of the average published undiluted NAV in
the period, calculated in accordance with Association of Investment
Companies guidelines.
|
Ongoing charges show the drag on
performance caused by the operational expenses incurred by the
Company.
|
The ongoing charges of the Company
for the financial year under review represented 3.23% (2023: 3.21%)
of the average net assets.
The annual running costs of the
Company are capped at 3.5% of the Company's NAV, above which, the
Investment Manager will bear any excess costs.
|
A key measure of Operational
performance.
This is calculated in line with
AICs guidance. Ongoing charges are those expenses of a type which
are likely to recur in the foreseeable future, whether charged to
capital or revenue, and which relate to the operation of the
Company excluding the costs of acquisition and
disposal of investments, financing charges and gains/losses arising
on investments.
|
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| |
VCT Regulation
Compliance with VCT
legislation
By making an investment in a
Venture Capital Trust, Shareholders become eligible for several tax
benefits under VCT tax legislation. This is, however, contingent on
the Company complying with VCT tax legislation.
To achieve compliance, the Company
must meet a number of tests set by HMRC. A summary of these steps
is set out on page 64 under "VCT Regulation".
The Board can confirm that
throughout the year ended 29 February 2024 the Company continued to
meet these legislative requirements.
Tax Benefits
The Company's objective is to
provide Shareholders with an attractive income and capital return
by investing its funds in a broad spread of unlisted UK companies
which meet the relevant criteria for investment by Venture Capital
Trusts.
Investing in a VCT brings the
benefit of tax-free dividends, as well as up-front income tax
relief and exemption from capital gains tax on disposal.
Investors can invest up to
£200,000 in VCTs per tax year and receive tax relief of up to
£60,000 (30%). To benefit from the relief, an investor must have
paid or owe as much tax during the tax year in which you invest. To
keep the relief, VCT investments must be held for at least five
years.
Although VCTs are typically growth
investments, and any capital growth is tax free, the majority of
returns are normally paid through tax-free dividends. After the
sale of a successful company within the portfolio, the profit can
be distributed to investors as a larger or special dividend, and
the remaining capital reinvested in new opportunities. A sale of
VCT shares after the five year holding period is exempt from
capital gains tax.
The Investment Manager, utilising
advice from Philip Hare & Associates LLP, ensures continued
compliance with any legislative changes.
The Company has been approved as a
VCT by His Majesty's Revenue and Customs.
Principal Risks and Uncertainties and Emerging
Risks
The Directors seek to mitigate the Company's
principal risks by regularly reviewing performance and monitoring
progress and compliance. In the mitigation and management of these
risks, the Directors carry out a robust assessment of the Company's
emerging and principal risks, including
those that would threaten its business model, future performance,
solvency or liquidity and reputation.
The main areas of risk identified by them,
along with the risks to which the Company is exposed through its
operational and investing activities, are detailed below. The Board
maintains a comprehensive risk register which sets out the risks
affecting both the Company and the investee companies in which it
is invested. The risk register is updated at least twice a year and
reviewed by the Audit Committee to ensure that procedures are in
place to identify principal risks and to mitigate and minimise the
impact of those risks should they crystallise.
The risk register also identifies emerging
risks to determine whether any actions are required. As it is
not possible to eliminate risks completely, the purpose
of the Company's risk management policies and procedures is
to identify and manage risks, reducing possible adverse
impacts.
Details of the Company's internal controls are
contained in the Corporate Governance section on pages
45 to 52 and further
information on exposure to risks including those associated with
financial instruments is given in note 17 of the financial
statements.
Going forward, the Board has reviewed and
approved some enhancements to the current risk management
framework, which became effective from March 2024. These
enhancements will underpin the approach to the identification and
categorisation of risks, together with changes to the assessment
approach - being more reflective of the individual nature of the
risks being considered. This will enable the Board to view the
risks through the lens of Strategic risks, Financial risks
(Investment, Capital & Liquidity) and Non-Financial risks
(Operational, Legal & Regulatory). In turn, the Board will be
re-assessing risk appetites for its most material risks.
The Directors have reviewed the
current register and can confirm that the risk landscape has not
changed and the risks presented remain stable with no material
changes to report.
VCT Qualifying Status
Risk The Company is always required
to observe the conditions laid down in the Income Tax Act 2007 for
the maintenance of approved VCT status. The loss of such approval
could lead to the Company losing its exemption from corporation tax
on capital gains, to investors being liable to pay income tax on
dividends received from the Company and, in certain circumstances,
to investors being required to repay the initial income tax relief
on their investment.
Mitigation:
The Investment Manager keeps the Company's
VCT-qualifying status under continual review and reports to the
Board at Board Meetings. Philip Hare & Associates LLP undertake
an independent annual review on the VCT status. Any new Venture
investments are reviewed by legal advisers, and their opinion
sought on whether the investment meets the criteria to be a
qualifying investment.
Investment
Risk The Company's VCT-qualifying
investments will be held in small and medium-sized unquoted
investments which, by their nature, entail a higher level of risk
and lower liquidity than investments in large, quoted companies,
impacting both returns and timings.
Mitigation:
The Directors and Investment Manager aim to limit
the risk attached to the portfolio by careful selection and timely
realisation of investments, by carrying out due diligence
procedures appropriate to the size of each investment and by
maintaining a spread of holdings both in terms of industry and in
terms of the total number of portfolio companies which is now
approaching 50. The Board reviews the investment portfolio with the
Investment Manager on a regular basis. Where possible, a member of
the Investment Manager team either holds a seat on the board of the
portfolio companies or has the right to act as a Board Observer.
This enables the Investment Manager to observe developments at the
portfolio company and offer assistance when and where this may be
required. The Venture Strategy aims to mitigate some of the risks
typically associated with venture capital investing by proactively
working with businesses with the potential for high growth that are
typically actively solving problems for established corporates,
increasing their chances of success, as set out in further detail
on pages 26 to 32.
Financial Risk
As a VCT, the Company is exposed to market price
risk, interest rate risk, credit risk, foreign currency risk and
liquidity risk. As most of the Company's investments will involve a
medium to long-term commitment and will be relatively illiquid, the
Directors consider that it is inappropriate to finance the
Company's activities through borrowing, other than for short-term
liquidity.
Mitigation:
The key elements of financial risk are discussed
in more detail in note 17. At the reporting date, the Company had
no borrowings and substantial liquid funds on the Statement of
Financial Position.
Legislation
Risk There is a risk of changes to
legislation and/or Government Policy, caused by future governments
taking a different approach which could result in changes to the
tax status of or rules governing VCTs.
Mitigation:
There is a practice of consultation before any
major changes are implemented. It is important that the Company can
respond proactively to any changes and understand what, if any,
impact they will have.
Emerging
Risks
Climate Change Risk
Due to the medium to long-term
time horizon of Climate Change this risk is deemed as an emerging
risk.
Climate Change or related
legislation is considered unlikely to have a major near-term impact
on the Company, as the vast majority of the portfolio is made up of
a diversified range of software-based businesses. Each prospective
new company holding is considered with regard to how it may be
impacted by climate change, particularly in relation to sources of
energy associated with data storage, and how this could in turn
affect future growth.
Triple Point as Investment Manager
is committed to sound management of climate risk and opportunity to
ensure the long-term protection of asset value through reduction of
exposure to the risk and also to contribute to essential carbon
reduction requirements. The Investment Manager has now set
near-term science-aligned Net Zero targets. The targets have been
submitted to the Net Zero Asset Managers Initiative and at the time
of reporting the business was awaiting acceptance of the submitted
targets. Triple Point also publish a Carbon Reduction Plan which is
available on its website.
Macroeconomic
Conditions
A further deterioration in
macroeconomic conditions, such as a severe recession or stagnant
inflation ("stagflation"), could have both a direct and indirect
impact on existing portfolio companies, particularly in the event
that investor risk appetite declines, as this would make it harder
to secure new venture funds or other capital, which is often
necessary for their continued long-term operations.
The ongoing and increasing level
of global tension and conflict has proven to impact the global
supply chains and dynamically influence the macroeconomic
landscape, all of which has knock on impacts to both the
performance of our portfolio companies and appetite of our investor
base.
In addition to macroeconomic risk,
any sustained deterioration of trust, liquidity or capital in the
banking sector could have a material impact on existing portfolio
companies given their reliance on existing cash reserves to fund
regular outgoings. The Investment Manager continues to closely
monitor the cash position of portfolio companies.
Going Concern
The Company's business activities,
together with the factors likely to affect its future development,
performance and position, are set out in the Investment Manager's
Review. The Company faces a number of risks and uncertainties, as
set out above.
The Company's going concern
position is also discussed in note 2 to the financial
statements.
The Financial Risk Management
objectives and policies of the Company, including exposure to price
risk, interest rate risk, credit risk and liquidity risk are
discussed in note 19 to the financial statements.
The Company continues to meet
day-to-day liquidity needs through its cash resources on hand. The
Company takes an active approach to manage liquidity and increase
the return on cash held.
The Company continues to raise
funds via new share issues to investors, and at the reporting date
the Company had cash of £18.2 million and net current assets of
£18.1 million (2023: £11.8 million). A further £7.6 million has
been raised since the reporting date, further strengthening the
Company's liquidity position.
The major cash outflows of the
Company continue to be the payment of dividends to Shareholders,
costs relating to the funding of investments and management fees
due to the Investment Manager. Dividends and, for the most part,
new investments are discretionary.
The Directors have reviewed cash
flow projections, including various scenarios comprising a
plausible downside scenario where fundraising is at a reduced level
and inflation remains higher for longer and a severe downside
scenario, whereby the Company does not raise any future capital and
inflation remains higher for longer. In both downside scenarios,
the Company has sufficient financial resources to meet its
obligations for at least 12 months from the date of this report
being the end of May 2025.
Accordingly, the Directors
continue to adopt the going concern basis in preparing the financial
statements.
Viability Statement
In accordance with the FRC UK
Corporate Governance Code published in 2018 and provision 36 of the
AIC Code of Corporate Governance, the Directors have assessed the
prospects of the Company over a period of five years, consistent
with the expected minimum investment holding period of a VCT
investor. Under VCT rules, subscribing investors are required to
hold their investment for a five-year period in order to benefit
from the associated tax reliefs. The Board regularly considers
strategy, including investor demand for the Company's shares, and
the Board considers five years as a reasonable time period for
reviewing the Company's prospects.
In order to assess this
requirement, the Board regularly considers the Company's strategy
and considers the Company's current position. The Board has carried
out a robust assessment of the principal and emerging risks,
including those that would threaten the Company's business model,
future performance, solvency or liquidity and reputation.
Consideration has also been given to the Company's reliance on, and
close working relationship with, the Investment Manager. This has
enabled the Directors to state that they have a reasonable
expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the period of their
assessment.
More information on the principal
risks of the Company is set out on pages 18 to 19
The Board has considered both the
Company's long-term and short-term cash flow projections and
considers these to be realistic and reasonable.
To provide this assessment the
Board has considered the Company's financial position and ability
to meet its expenses as they fall due as well as considering
longer-term viability. Factors taken into account
include:
·
the expenses of the Company are predictable and
modest in comparison with the assets and there are no capital
commitments foreseen which would alter that position;
· the
Company has no employees, only Non-Executive Directors, and
consequently does not have redundancy or other employment related
liabilities or responsibilities;
· most
of the Company's investments will involve a medium to long-term
commitment and will be relatively illiquid but the Company reduces
the risk as a whole by careful selection and timely realisation of
investments;
· the
Directors will continue to monitor closely changes in the VCT
legislation and adapt to any changes to ensure the Company
maintains approval. The Directors have appointed an independent
adviser to undertake the VCT status monitoring role; and
· the
Directors have considered the ongoing and future effects of
external events (such as global tensions and conflicts)on the
Company and its longer-term viability. More detail on this is
included in the Principal Risks and Uncertainties section on pages
18 to 19.
Based on the results of this
review, the Directors have a reasonable expectation that the
Company will be able to continue its operations and meet its
expenses and liabilities as they fall due over the period of their
assessment.
Section 172(1)
Statement
The following disclosure describes
how the Directors have had regard to the matters set out in Section
172(1)(a) to (f) when performing their duty under Section 172 and
forms the directors' statement required under Section 414CZA of the
Companies Act 2006.
Stakeholder Engagement
This section describes how the
Board engages with its key stakeholders, and how it considers their
interests when making its decisions. Further, it demonstrates how
the Board takes into consideration the long-term impact of its
decisions, and its desire to maintain a reputation for high
standards of business conduct.
.
Stakeholder
|
Importance
|
Board Engagement
|
Shareholders
|
Continued Shareholder support is
critical to the sustainability of the Company and the delivery of
its strategy.
|
The Board is committed to
maintaining open channels of communication with
Shareholders.
Formal updates are provided to
Shareholders on a quarterly basis or as part of the Annual or
Interim Reports, and the Board and the Investment Manager will also
respond to any written queries made by Shareholders during the
course of the year. The Chair provides feedback to the Board and is
responsible for providing a clear understanding of the views of
Shareholders to the Board. The Board recognises the importance of
providing strong financial returns to Shareholders and the eligible
tax benefits under VCT tax legislation and takes this into
consideration when making investments into investee companies,
approving offers for subscription and declaring
dividends.
The Board continues to engage with
Shareholders through its Annual and Interim Reports, RNS
communications, and encourages Shareholders to attend
AGMs.
|
Investment Manager
|
The Investment Manager's
performance is critical to the Company to enable it to successfully
deliver its investment strategy and meet its long-term investment
objectives of capital growth and tax-free dividends.
|
The Board has delegated the
authority for the day-to-day running of the Company to the
Investment Manager. The Board then engages with the Investment
Manager in reviewing, setting, approving and overseeing the
execution of the Investment Policy and strategy of the
Company.
The Investment Manager attends
both Board and other committee meetings to update the Board on the
performance of the Company and its portfolio. At each quarterly
Board meeting, a review of financial and operating performance of
the Company and its investments is undertaken, including a review
of legal and regulatory compliance.
The Board also reviews other areas
including the Company's strategy, key risks, corporate
responsibility, compliance and legal matters.
|
Investee companies
|
The Company through its Investment
Manager has important relationships with individuals responsible
for the management and performance of its investee
companies.
|
The Investment Manager maintains
regular contact with portfolio companies and, where appropriate,
sits on the Board of those companies, and receives regular
performance reports.
|
External Service
Providers
|
To function as a VCT with a
premium listing on the London Stock Exchange, the Company relies on
external service providers for support in meeting all relevant
obligations.
These service providers are
fundamental to ensuring that the Company meets the high standards
of conduct that the Board sets.
|
The Company has a number of
service providers which include the Investment Manager, Company
Secretary, Depositary, Registrar, Legal Advisers, VCT Compliance
Adviser and the Auditor. The Board
receives periodic reports from other service providers on their
activities and performance.
The Board has regular contact with
the two main service providers, the Investment Manager and the
Company Secretary through quarterly Board meetings and more regular
discussions with the Board.
|
Community
|
The Directors recognise that the
long-term success of the Company is linked to the success of the
communities in which the Company and its investee companies,
operate.
|
The Board encourages the
responsible investment ethos of the Investment Manager. The Board
is cognisant of the impact of the Company's operations and of the
companies in which it invests and believes that its investment
activities have many positive benefits beyond the returns delivered
for Shareholders.
|
Regulators
|
Good governance and compliance
with regulations is essential to achieving continued
success.
|
The Company engages an external
adviser to report on its compliance with the VCT rules.
|
Principal Decisions
Below are the principal decisions
made or approved by the Directors during the year. In taking these
decisions, the Directors considered their duties under Section 172
of the Act. Principal decisions have been defined as those that
have a material impact to the Company and its key stakeholders, as
defined above.
Director
appointment
During the period, the Board
undertook a recruitment process for a new director, with the
assistance of an external search consultancy. Sam Smith was
appointed to the Board as Independent Non-Executive Director
effective 8 February 2024. Sam was also appointed as a member of
the Audit Committee and Senior Independent Non-Executive Director
effective the same date. Sam's bio can be found on page
44.
Change of AIFM
arrangements
During the period, effective 12
September 2023, the Investment Manager was appointed as the
Company's AIFM and is now responsible for risk management and
portfolio management. Therefore, the Investment Manager has full
discretion under the Investment Management Agreement to make
investments in accordance with the Company's Investment Policy from
time to time. In addition, the Company has appointed a depositary
Indos Financial Limited, and their details can be found on page
99.
Payment of
dividends
During the year, the Company paid
a 2 pence per Share interim dividend on 4 September 2023 and
declared a further 2 pence per Share interim dividend on 3 January
2024, which was paid shortly after the period end on 18 March
2024.
Strategic
Report
Investment Manager's
Review
Sector
Analysis
The unquoted investment portfolio
can be analysed as follows:
* Under current VCT
regulations the Company has three years before undeployed cash
counts towards the qualifying status of the Company. Undeployed
cash is therefore not taken into account in determining the Current
Qualifying status percentage of the Company, which at the year-end
was above 80%.
The year under review was the
fifth for the Venture strategy. Against a backdrop of continued
softness in the macro environment during the year, which also saw a
drop in the overall number of venture capital deals in the UK and
US, Triple Point's Venture team continued to make good progress in
deploying the Company's cash. The team completed eight new
qualifying investments as well as 11 follow-on investments into a
diverse range of sectors spanning climate, health, hospitality
operations, business intelligence, fintech and HR-Tech. As at the
end of February 2024, the portfolio consists of stakes in 48
qualifying technology businesses.
The Company distributed £1.1m to
Shareholders during the year by way of dividends, as well as
distributing the final returns to the A and B Share
classes.
Strategy
The Company looks to maximise
Shareholder returns by investing in innovative early-stage
businesses, typically at the point where they have achieved some
market validation for their product or service, with one or more
contracts secured with a corporate customer. The core investment
focus for the Company has thus been at the Seed and Series A stage
funding rounds, investing in business-to-business technology
companies - often with a specialist software product - that are
raising funds to drive product and sales development in order to
take their revenues to the next level. The Company also seeks to
invest in a select number of so-called "Pre-Seed" technology
businesses every year which may be pre-revenue but where there is a
particularly compelling opportunity, perhaps because of the
founding team, or the product opportunity, or the feedback we have
received from potential customer due diligence.
Net
asset value and the funding
environment
The Venture NAV per Share declined
to 98.55 pence from 102.17 pence at the end of last year
representing a 3.5% reduction. The total return for the Company,
being NAV plus cumulative dividends paid up to 29 February 2024 of
11 pence per Share, is 109.55 pence per Share (2023: 111.17 pence
per Share). Last September's 2 pence per Share interim dividend
payment was the fourth dividend for the Venture Shares, with an
additional fifth interim dividend of 2 pence per Share paid in
March 2024, bringing total dividends paid to date to 13 pence per
Share. The Venture Shares went ex-dividend on 15 February
2024.
The decline in NAV per Share over
the year was driven by the 2 pence per Share of interim dividends
paid during the year, as well as the net running costs of the
Company. The net portfolio values remained broadly flat during the
year with a small valuation gain, which reflected a continued
fairly challenging venture funding environment in the first six
months of the year in review as a result of higher interest rates
and the hangover from the listed tech equity valuation correction
of 2022.
The first half of the year was
impacted by further consecutive interest rate rises, peaking in
August 2023, with other major central banks following a very
similar trajectory. Consequently, the fundraising environment had
become more testing for many start-up founders as many venture
funds were deploying capital at a slower rate and became much more
challenging in their assessment of what "good" looks like at each
stage of the venture journey. The benchmarks for success sought by
venture capital investors (VCs) changed, shifting the emphasis from
pure growth potential to capital efficiency in early 2023. As a
result, many venture backed businesses, including many of those in
our portfolio, took action to reduce their cash burn rates in order
to extend their cash runway. That phase, broadly from mid-2022
through to mid-2023, also saw a trend towards more fundraises being
carried out via convertible loan notes (CLNs, a form of loan that
can be converted to equity in the future in certain circumstances)
which, by providing loans, defer a new price being set for a
company's equity issuance. It should also be said that despite the
slightly sluggish overall environment, tech start-ups with either
convincing traction (i.e. 100% plus revenue growth year-on-year)
and/or compelling founding teams, were not struggling to raise the
funding that they needed.
During the second half of the
period under review, the market received a boost in light of
forecasts that interest rates may have peaked and might decline as
2024 progresses. This development potentially lowers the cost of
capital for start-ups and, more importantly, allows investors to
begin to look forward to economic recovery rather than focus on
fears of prolonged recession. Alongside this, there was a sustained
rally in large-cap tech shares in global stock markets, driven at
least partly by a period of optimism about the potential growth
opportunities arising from AI. Not coincidentally, we are beginning
to witness increased activity in the venture capital funding
market. During the period, several strongly performing portfolio
companies attracted capital from new investors at significant
valuation uplifts. We are pleased to report that seven portfolio
companies raised additional equity funding at higher valuations
during the period as they mature through the venture capital
lifecycle. These companies were SonicJobs, Konfir, Kamma, Fluent
(formerly Channel), Modo Energy, Scan.com and Visibly. This is up
from just three portfolio companies that had material valuation
gains in the 2022/23 financial year, highlighting the increased
market activity year-on-year.
It appears also that the trend of
CLNs and companies extending cash runway has begun to reverse as we
experience more companies returning to the market to raise equity
funding. One example from our own portfolio is Modo Energy. The
Company first invested in Modo early in 2023 via a CLN. In October
that same year, Modo raised a £12m priced equity round in which the
Company's CLN converted into equity. The Ventures team has also
seen some increase in competition to fund the better opportunities
as investors are returning to the market.
At the same time, we have started
to see a few flatter or "down-rounds", where founders and investors
accept that in order to raise further funds the valuations achieved
for the new funds may be lower than they were in 2020-21. While
this is naturally disappointing in individual cases, and impacts
valuations, we believe this increased activity and acceptance is
positive for the ecosystem, allowing some founders to raise the
necessary capital to pursue growth after a period of reducing costs
and focusing on extension of cash runway.
Valuations
As mentioned above, we continued
to see more activity in the market as the period progressed, with
seven companies raising additional equity funding at higher
valuations during the period. Several strongly performing portfolio
companies, such as Modo Energy and Scan.com, with strong revenue
growth and compelling founding teams, raised funding at
significantly higher valuations. Both companies will use the fresh
funding to pursue ambitious growth plans in the US. In the case of
Scan.com, this was the second up-round since the Company originally
invested. At the time of writing, several other portfolio companies
have also received signed term sheets for fresh equity funding at
higher valuations. As a result, we have seen a slight increase in
the NAV per Share since August.
There have also been a number of
portfolio companies which have not met our expectations. We have
initiated or increased existing downward fair-value adjustments to
17 portfolio companies during the year where we believe that growth
rates are not sufficient to offset market valuation declines or
that the risks associated with shortening cash runway are high or
rising. And, as mentioned in the Chair's statement, one Fintech
company has been exited at a loss as a result of founder
"burn-out".
As previously reported, the
portfolio contains some companies which benefitted from the very
positive valuation climate for fundraising back in 2021. We are
pleased to report that one of these companies raised a Series C
funding round during the period following a successful year. The
business grew invoiced revenues over 170% year-on-year and
contracted revenues by nearly 300%. However, we have continued to
maintain varying fair-value downward adjustments (versus observed
transaction price) on such companies where the observed valuations
have looked particularly stretched.
Portfolio
Support
We have continued to actively
support the Company's portfolio companies wherever we can by
participating in Board meetings, by helping them share best
practice through hosting regular events and by making relevant
introductions where necessary, be it through suppliers, potential
customers or via investor introductions for further fundraising
rounds. The fact that we have made 11 follow-on investments during
the period is testament to our willingness to support portfolio
companies that perform to or near to plan. We do not, however,
provide follow-on investment to all our portfolio companies - if
our experience since investment suggests that our original
investment thesis was flawed, then we will not make further
investments and "put good money after bad".
Deal Origination
and Deployment
As the Company's portfolio has
grown, so too has the number of follow-on investment opportunities.
But the Ventures team also continues to actively originate new deal
flow through a mixture of outbound origination and through
leveraging the team's network in the early-stage tech investing
sector. More active outbound origination specifically has allowed
us to continue to uncover compelling founders and innovations.
Where possible we are using digital tools to help us with outbound
origination, for example to identify and monitor new start-ups
being created by founders who have left well-regarded larger
venture-backed businesses. We also make outbound origination
contact in sub-sectors that excite us, rather than waiting for
start-ups to come to us.
In the period under review, the
team successfully completed eight new investments. These included
investments as part of a Seed stage investment round for Fluent
(formerly Channel, an AI analyst software for data), an investment
into Scan.com (an infrastructure layer to connect the global
diagnostic imaging market) and a Seed round for Visibly (a training
and supervision software for field engineers).
New investments also included a
machine learning and clinical innovation software to reshape the
delivery of primary care (Abtrace), a heat pump installer software
(Heat Geek), a core operations platform for restaurants (Nory), and
a recognition platform for real-world applications of computer
vision (SeeChange).
The Company provided follow-on
funding to three portfolio companies early in the period via CLNs
(discussed above), with one example being Semble, a clinic
management system, which helps healthcare practices manage all
aspects of their administration in once place. Semble continues to
grow steadily and the additional funding is being used to help the
business to pursue European expansion.
Examples of sectors in which we
continue to take an active interest are AI and data, Healthcare
Analytics, Energy transition and climate related software, and
Biotech (or "Techbio" as it is known when the tech does most of the
work). The advances in AI make us keener
than ever on companies that have a data angle - more and better
data and information is the feedstock required to train useful AI
models. Thus, we actively look for companies that generate
specialist data, even if it is, to begin with, more of a by-product
of their core service than an objective. While we will surely see
the benefits of a whole range of new drugs and materials being
discovered over the coming years, it is important that we recognise
the risks and limitations of AI and ensure that its benefits are
harnessed responsibly.
While renewables now contribute a
greater share of UK energy mix than fossil fuels, significant
ongoing investment is still required to build the smart cities and
grid that a net zero world requires. Our preferred business models
for investment in this area remain software solutions or perhaps
niche hardware that supports the wider infrastructure
development.
Portfolio
Since inception of the Venture
strategy, the Company has made 51 venture investments. The year in
review saw no complete failures (company in administration with
100% loss) by our portfolio companies. In fact, we have experienced
only one complete failure since inception. This is testament to the
focus that the investment team places on quality of teams and the
continued support we provide to our portfolio companies that
deserve it. However, the Company did experience a crystallised
loss, exiting Localz in the logistics sector, which was acquired by
Descartes Systems Group at a 39% loss. That was the best option
given Localz was unable to raise new venture funding and we were
able to return some proceeds to the Company from a business which
suffered in the aftermath of the Covid-19 pandemic. During the
period, we also took a full write-down on one portfolio company,
which we expect to enter into an orderly wind down in the coming
months. While disappointing, we view the failure of some
investments as an inevitable part of venture investing, which is
why we always look for new investments to have the potential to
provide significant return multiples on initial in investment
costs.
The most active sub-sectors for
deployment during the period were Healthtech, where £4.05m was
deployed, and Climate, where £3.55m was deployed. At the end of the
year the largest sub-sectors in terms of portfolio value were again
Fintech and Healthtech, two sectors in which the Triple Point has
particular experience. However, while there were some notable gains
in Health, it has been a tougher year for the Fintech sector, with
the portfolio recording two down valuations.
Of the eight new investments made
this year, six were made at Seed stage and two at pre-Seed. While
the Seed focus is clear for new investments, the Company also
continues to back later stage deals via its existing portfolio
companies; during the period, there were six Series A follow-on
funding rounds, and one Series B round. It is worth noting that
different investors attribute different nomenclature to different
rounds, and Seed stage for one investor might be Series A for
another. Our focus continues to be on those companies that have
early evidence of product-market fit and are looking to raise
between £1 million and £5 million to take them to the next level.
We very much continue to see ourselves as a Seed stage investor.
Many of the businesses in which the Company invests involve the use
of leading-edge technology and would be classified as
"knowledge-intensive" by HMRC rules - very much the types of
innovative UK businesses that the government wishes to see backed
by VCT capital, and which allows investors to benefit from
substantial tax reliefs. Such investing comes with risks to
capital, some of which we aim to mitigate by focusing investment on
businesses that are actively solving significant problems for
commercial customers.
Liquidity
Management
In light of higher interest rates,
we have taken active steps to manage liquidity. Throughout the
period, the majority of the Company's liquid funds awaiting
deployment have been invested in money market funds and a corporate
bond fund. The Company has opened accounts and invested in the
BlackRock International Cash Series Sterling Government Liquidity
Fund, the BlackRock International Cash Series Sterling Liquidity
Fund, the Vanguard UK Short-Term Investment Grade Bond Index Fund,
and the HSBC Sterling ESG Liquidity Fund. In today's interest rate
environment this improves the return on the Company's cash
(relative to bank deposits) whilst complying with VCT rules on
sources of income. These funds provide easy access to the Company's
liquidity, while ensuring there is no cash drag on funds awaiting
deployment into qualifying investments.
ESG
Both the Board and the Investment
Manager believe Environmental, Social and Governance ("ESG")
considerations are important, and they are taken into account
through the investment process within the Company. Whilst
early-stage companies do not have the scale or resources to adopt
the full scale of ESG initiatives open to large corporates, we
always consider the processes and policies they have in place to
ensure that they are proportionate to their size and activities,
and recognise that acting when small lays the foundation of good
ESG for the future. It also provides a competitive advantage for
small companies seeking business with large corporates who have ESG
supply chain requirements. Please see the section on ESG and
Responsible Investing on pages 41 to
42 for further information.
Outlook
As discussed above, 2022-23 was a
challenging period at the macro level and for many start-ups
seeking venture funding. Despite that, we have continued to see
entrepreneurial activity and innovation thrive, evidenced by the
number of investment opportunities that we continue to find and
invest in from the Company. What's more, larger corporates are
actively increasing spend on productivity-enhancing software
solutions (despite a tougher economic environment and focus on
costs). We believe this leaves the portfolio well positioned for
future growth.
While the economic backdrop
remains soft, interest rates now appear to have peaked. It is
increasingly looking like the Bank of England will start to cut
interest rates in the second half of 2024, and forecasts suggest
the economy is likely to gather a bit of pace as 2024 progresses.
We have already seen a strong recovery in listed tech stocks;
indeed the NASDAQ index is near new highs as we write. While that
rally has been dominated by the mega-cap tech stocks rather than
the smaller caps that may be better analogies for our unquoted
venture investments, we have also seen a stabilisation in mid-cap
Saas stock valuations and a modest recovery in the Initial Public
Offering market.
While venture deal volumes
remained down year-on-year in Q4 2023, we believe the
aforementioned modest signs of optimism have more recently begun to
be apparent in the venture funding markets. We have already
described the increased activity that the Company's portfolio
witnessed in the second half of the year in review; the balance of
which was positive for the first time in 18 months, suggesting the
market is beginning to normalise. Even the willingness in some
cases of founders and boards to accept funding rounds at lower
valuations than previous rounds in order to move their businesses
forward is symptomatic of a world where business people are ready
to move on. And there is a clear enthusiasm around AI and the
businesses that can exploit it, both in the listed sector and in
our own venture niche. Even looking outside our technology niche,
there are signs of M&A and restructuring picking up in other
sectors.
All-in-all then, there appears to
be a far better case for forward-looking optimism about the venture
capital and start-up world than there was a year ago.
It is early days and risks remain,
as ever. We would highlight (i) the risk that services and wage
inflation is more persistent than hoped in the UK and US this year,
which could dent current optimism about the likely trajectory of
interest rates, (ii) the continued risk from geopolitical events
after we escaped from the Ukraine-invasion inspired mini
energy-shock of 2022 with less damage than was expected and (iii)
the risk of markets and venture capitalists getting carried away
again about the latest craze, centred this time on AI. Regarding
the latter, we think that it is too early to be overly concerned,
that there are plenty of interesting investment opportunities
around AI beyond just the pure-play investments, and that we can be
careful regarding the valuations paid for opportunities that are
over-popular.
Deal flow remains strong and there
continues to be no shortage of companies with innovative business
ideas seeking funding. As the VCT's fundraise draws to a close, the
Company is in a healthy cash position to access these innovative
companies, particularly where some investors are yet to return to
the market. As ever, our focus continues to be on finding and
backing software start-ups that we believe have the potential to
generate returns of at least 10x our investment cost, that are
operating in large markets and that have strong founding
teams.
There are a number of areas where
we see particular promise. We are searching for software that can
enable the energy transition and carbon management; we are
interested in businesses using end-to-end vertical software to
revolutionise business models in services sectors, perhaps by
delivering the whole service themselves in a tech-enabled way,
rather than just selling software to another service business; we
are looking for companies in all niches, but particularly health,
where data is a significant by-product of their core product -
companies with the best access to data will be better able to
exploit AI opportunities in the future. Finally, we are talking to
companies that combine software with hardware, perhaps with the
software replicating part of what the hardware currently does (for
example laboratory-based testing).
It is an exciting time to be a
seed-focused venture investor.
Ian McLennan
Partner
For Triple Point Investment
Management LLP
31 May
2024
Strategic Report - Investment Portfolio
Summary
Qualifying holdings
|
29 February
2024
|
|
28 February
2023
|
|
Cost
|
Valuation
|
|
Cost
|
Valuation
|
|
£'000
|
%
|
£'000
|
%
|
|
£'000
|
%
|
£'000
|
%
|
Unquoted qualifying
holdings
|
38,426
|
67.30
|
43,333
|
69.87
|
|
27,291
|
59.34
|
31,498
|
62.74
|
Non-Qualifying holdings
|
470
|
0.82
|
491
|
0.79
|
|
471
|
1.02
|
481
|
0.96
|
Financial assets at fair value
through profit or loss
|
38,896
|
68.12
|
43,824
|
70.66
|
|
27,762
|
60.36
|
31,979
|
63.70
|
Cash and cash
equivalents
|
18,199
|
31.88
|
18,199
|
29.34
|
|
18,222
|
39.64
|
18,222
|
36.30
|
|
57,095
|
100.00
|
62,023
|
100.00
|
|
45,984
|
100.00
|
50,201
|
100.00
|
|
29 February
2024
|
|
28 February
2023
|
|
Cost
|
Valuation
|
|
Cost
|
Valuation
|
|
£'000
|
%
|
£'000
|
%
|
|
£'000
|
%
|
£'000
|
%
|
Non-Qualifying holdings
|
|
|
|
|
|
|
|
|
|
Modern Power Generation
Ltd
|
470
|
0.82
|
491
|
0.79
|
|
471
|
1.02
|
481
|
0.96
|
|
29 February
2024
|
|
28 February
2023
|
Qualifying Holdings
|
Cost
|
Valuation
|
|
Cost
|
Valuation
|
Venture Investments
|
£'000
|
%
|
£'000
|
%
|
|
£'000
|
%
|
£'000
|
%
|
Degreed
|
300
|
0.53
|
411
|
0.66
|
|
300
|
0.65
|
432
|
0.86
|
Augnet
|
300
|
0.53
|
29
|
0.05
|
|
300
|
0.65
|
100
|
0.20
|
Aptem
|
150
|
0.26
|
441
|
0.71
|
|
150
|
0.33
|
441
|
0.88
|
Counting Up
|
920
|
1.61
|
641
|
1.03
|
|
920
|
2.00
|
1,044
|
2.08
|
Ably Real Time
|
1,312
|
2.30
|
2,452
|
3.95
|
|
1,312
|
2.85
|
3,153
|
6.28
|
Semble
|
1,760
|
3.08
|
2,374
|
3.83
|
|
760
|
1.65
|
1,374
|
2.74
|
Vyne Technologies
|
1,752
|
3.07
|
1,585
|
2.56
|
|
1,752
|
3.81
|
3,233
|
6.44
|
Pelago
|
1,245
|
2.18
|
2,399
|
3.87
|
|
1,245
|
2.71
|
2,565
|
5.11
|
Realforce
|
799
|
1.40
|
223
|
0.36
|
|
799
|
1.74
|
638
|
1.27
|
Airly
|
987
|
1.73
|
853
|
1.38
|
|
987
|
2.15
|
999
|
1.99
|
Biorelate
|
1,000
|
1.75
|
1,000
|
1.61
|
|
1,000
|
2.17
|
1,000
|
1.99
|
Artificial Artists
|
150
|
0.26
|
75
|
0.12
|
|
150
|
0.33
|
150
|
0.30
|
Veremark
|
910
|
1.59
|
2,095
|
3.38
|
|
910
|
1.98
|
1,529
|
3.05
|
Sealit
|
200
|
0.35
|
50
|
0.08
|
|
200
|
0.43
|
100
|
0.20
|
Bkwai
|
250
|
0.44
|
-
|
-
|
|
250
|
0.54
|
91
|
0.18
|
Exate
|
500
|
0.88
|
250
|
0.40
|
|
500
|
1.09
|
400
|
0.80
|
Expression Insurance
|
1,000
|
1.75
|
573
|
0.92
|
|
1,000
|
2.17
|
118
|
0.24
|
Kamma
|
800
|
1.40
|
902
|
1.45
|
|
500
|
1.09
|
200
|
0.40
|
Seedata
|
150
|
0.26
|
75
|
0.12
|
|
150
|
0.33
|
150
|
0.30
|
Stepex
|
499
|
0.87
|
350
|
0.56
|
|
499
|
1.09
|
399
|
0.79
|
Ryde
|
2,000
|
3.50
|
1,800
|
2.90
|
|
1,988
|
4.32
|
1,988
|
3.96
|
Payaable
|
343
|
0.60
|
219
|
0.35
|
|
343
|
0.75
|
438
|
0.87
|
Tickitto
|
1,000
|
1.75
|
500
|
0.81
|
|
1,000
|
2.17
|
800
|
1.59
|
SonicJobs
|
600
|
1.05
|
788
|
1.27
|
|
450
|
0.98
|
638
|
1.27
|
Catalyst
|
224
|
0.39
|
112
|
0.18
|
|
224
|
0.49
|
224
|
0.45
|
Knok
|
684
|
1.20
|
947
|
1.53
|
|
513
|
1.12
|
640
|
1.27
|
Learnerbly
|
200
|
0.35
|
235
|
0.38
|
|
200
|
0.43
|
200
|
0.40
|
Pixie
|
915
|
1.60
|
487
|
0.79
|
|
915
|
1.99
|
915
|
1.82
|
PetsApp
|
1,000
|
1.75
|
1,000
|
1.61
|
|
1,000
|
2.17
|
1,000
|
1.99
|
Ramp
|
309
|
0.54
|
309
|
0.50
|
|
308
|
0.67
|
308
|
0.61
|
Konfir
|
800
|
1.40
|
838
|
1.35
|
|
500
|
1.09
|
519
|
1.02
|
Konstructly
|
300
|
0.53
|
300
|
0.48
|
|
300
|
0.65
|
300
|
0.60
|
Visibly Tech
|
541
|
0.95
|
1,047
|
1.69
|
|
300
|
0.65
|
300
|
0.60
|
Crowd Data
|
500
|
0.88
|
350
|
0.56
|
|
500
|
1.09
|
500
|
1.00
|
Trumpet
|
220
|
0.39
|
220
|
0.35
|
|
120
|
0.26
|
120
|
0.24
|
Fluent (formerly
Channel)
|
700
|
1.23
|
1,489
|
2.40
|
|
400
|
0.87
|
400
|
0.80
|
Scan.com
|
1,800
|
3.15
|
3,370
|
5.44
|
|
800
|
1.74
|
1,000
|
1.99
|
OutThink
|
1,000
|
1.75
|
1,000
|
1.61
|
|
1,000
|
2.17
|
1,000
|
1.99
|
Shenval*
|
497
|
0.87
|
258
|
0.42
|
|
497
|
1.08
|
292
|
0.58
|
AeroCloud
|
1,500
|
2.63
|
1,500
|
2.42
|
|
1,500
|
3.26
|
1,500
|
2.99
|
Modo Energy
|
2,250
|
3.94
|
2,968
|
4.80
|
|
-
|
-
|
-
|
-
|
Virtual Science AI
|
182
|
0.32
|
182
|
0.29
|
|
-
|
-
|
-
|
-
|
Fertifa
|
1,000
|
1.75
|
1,000
|
1.61
|
|
-
|
-
|
-
|
-
|
Nory
|
1,527
|
2.67
|
2,116
|
3.41
|
|
-
|
-
|
-
|
-
|
SeeChange
|
1,500
|
2.63
|
1,500
|
2.42
|
|
-
|
-
|
-
|
-
|
Heat Geek (formerly
Skoon)
|
1,000
|
1.75
|
1,000
|
1.61
|
|
-
|
-
|
-
|
-
|
Tuza (formerly
Statement)
|
150
|
0.26
|
320
|
0.52
|
|
-
|
-
|
-
|
-
|
Abtrace
|
700
|
1.23
|
700
|
1.13
|
|
-
|
-
|
-
|
-
|
Localz
|
-
|
-
|
-
|
-
|
|
750
|
1.63
|
300
|
0.60
|
|
38,426
|
67.30
|
43,333
|
69.87
|
|
27,291
|
59.34
|
31,498
|
62.74
|
*Green Highland Shenval Ltd was
transferred from A Shares to the Venture Shares in November 2022
following a valuation adjustment. It was acquired by the Company in
February 2017 for £860k.
Financial Assets are measured at
fair value through profit or loss. The initial best estimate of
fair value of these investments that are either quoted or unquoted
on an active market is the transaction price (i.e. cost). The fair
value of these investments is subsequently measured by reference to
the enterprise value of the investee company, which is best deemed
to reflect the fair value. Where the Board considers the investee
company's enterprise value to remain unchanged since acquisition,
investments continue to be held at cost (less any loan repayments
received).
Strategic Report -
Investment Portfolio Ten Largest Investments
National MRI Scan Limited
|
|
|
|
|
|
|
Date of first
investment
|
Cost £
|
Valuation
£
|
Valuation
Method
|
Income recognised by TPV for
the year £'000
|
Equity Held by TPV
%
|
Other Equity Held by TPIM
managed funds %
|
|
27-Jul-2022
|
1,799,990
|
3,369,415
|
Last
Equity Raise
|
-
|
3.30%
|
-
|
|
|
|
|
|
|
|
|
|
Summary of Information from
Investee Company Financial Statements*:
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets as at 31 Dec
2022
Net assets as at 31 Dec
2021
|
|
(2,259)
1,341
|
|
|
|
Scan.com is building the
infrastructure layer to connect the global diagnostic imaging
market, aiming to solve the lack of price transparency for imaging,
long waiting lists and reliance on archaic
workflows.
* The Investees are required only to submit Small Companies
Accounts to Companies House hence only net assets have been
disclosed.
|
|
Modo Energy Ltd
|
|
|
|
|
|
|
Date of first
investment
|
Cost £
|
Valuation
£
|
Valuation
Method
|
Income recognised by TPV for
the year £'000
|
Equity Held by TPV
%
|
Other Equity Held by TPIM
managed funds %
|
|
03-Mar-2023
|
2,250,084
|
2,968,446
|
Last
Equity Raise
|
-
|
5.34%
|
-
|
|
|
|
|
|
|
|
|
|
Summary of Information from
Investee Company Financial Statements*:
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets as at 31 Oct
2023
Net assets as at 31 Oct
2022
|
|
8,787
2,708
|
|
|
|
Modo are creating a complete
platform for energy market and asset performance data.
* The Investees are required only to submit Small Companies
Accounts to Companies House hence only net assets have been
disclosed.
|
|
Ably Real-Time Ltd
|
|
|
|
|
|
|
Date of first
investment
|
Cost £
|
Valuation
£
|
Valuation
Method
|
Income recognised by TPV for
the year £'000
|
Equity Held by TPV
%
|
Other Equity Held by TPIM
managed funds %
|
|
30-Oct-2019
|
1,312,027
|
2,452,322
|
Last
Equity Raise adjusted for fair value
|
-
|
2.05%
|
-
|
|
|
|
|
|
|
|
|
|
Summary of Information from
Investee Company Financial Statements:
|
£'000
|
|
|
|
|
|
|
|
|
|
Turnover to year end 31 Jan
2023
Turnover to year end 31 Dec
2021
|
|
8,997
5,203
|
|
Earnings before interest, tax,
amortisation and depreciation (EBITDA) to year end 31 Jan
2023
Earnings before interest, tax,
amortisation and depreciation (EBITDA) to year end 31 Dec
2021
|
|
(17,372)
(8,003)
|
|
Profit before tax to year end 31
Jan 2023
Proft before tax to year end 31
Dec 2021
|
|
(17,308)
(8,061)
|
|
|
|
|
|
Net assets as at 31 Jan
2023
Net assets as at 31 Dec
2021
|
|
15,606
31,357
|
|
|
|
Ably is a real time data
delivery service provider.
|
|
.
Digital Therapeutics Inc (Pelago Health)
|
|
|
|
|
|
|
Date of first
investment
|
Cost £
|
Valuation
£
|
Valuation
Method
|
Income recognised by TPV for
the year £'000
|
Equity Held by TPV
%
|
Other Equity Held by TPIM
managed funds %
|
|
14-Feb-2020
|
1,245,285
|
2,399,112
|
Last
Equity Raise adjusted for fair value
|
-
|
1.28%
|
-
|
|
|
|
|
|
|
|
|
|
Summary of Information from
Investee Company Financial Statements*:
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pelago is a virtual clinic
for substance use management. Pelago is transforming substance use
support-from prevention to treatment-delivering education,
management skills, and opportunities for positive change to members
struggling with substance use.
* This company is exempt from
publishing accounts and hence no financial details are
disclosed.
|
|
Semble Technology Limited
|
|
|
|
|
Date of first
investment
|
Cost £
|
Valuation
£
|
Valuation
Method
|
Income recognised by TPV for
the year £'000
|
Equity Held by TPV
%
|
Other Equity Held by TPIM
managed funds %
|
20-Nov-2019
|
1,760,016
|
2,374,445
|
Last
Equity Raise
|
-
|
5.98%
|
-
|
|
|
|
|
|
|
|
Summary of Information from latest
available Investee Company Financial Statements*:
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets as at 31 Dec
2022
Net assets as at 31 Dec
2021
|
|
2,008
5,104
|
|
Semble is a clinical system
(EHR) built to enable medical clinicians and admin staff to
complete their day-to-day work in one place rather than needing to
use multiple systems. The software covers the entire patient
journey, saving the medical clinicians time, enabling them to spend
more time treating patients.
* The Investees are required only to submit Small Companies
Accounts to Companies House hence only net assets have been
disclosed.
|
Hospitality Growth Services Ltd (Nory AI
|
|
|
|
|
Date of first
investment
|
Cost £
|
Valuation
£
|
Valuation
Method
|
Income recognised by TPV for
the year £'000
|
Equity Held by TPV
%
|
Other Equity Held by TPIM
managed funds %
|
09-May-2023
|
1,527,229
|
2,116,036
|
Last
Equity Raise adjusted for fair value
|
-
|
7.23%
|
-
|
|
|
|
|
|
|
|
Summary of Information from latest
available Investee Company Financial Statements*:
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nory provide AI-enabled
software for hospitality businesses to manage their business and
restaurant operations.
* The company is yet to publish public
accounts.
|
Veremark Limited
|
|
|
|
|
|
|
Date of first
investment
|
Cost £
|
Valuation
£
|
Valuation
Method
|
Income recognised by TPV for
the year £'000
|
Equity Held by TPV
%
|
Other Equity Held by TPIM
managed funds %
|
|
12-Aug-2020
|
909,906
|
2,095,145
|
Last
Equity Raise
|
-
|
5.28%
|
-
|
|
|
|
|
|
|
|
|
|
Summary of Information from
Investee Company Financial Statements*:
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets as at 31 Dec
2022
Net assets as at 31 Dec
2021
|
|
5,257
1,547
|
|
|
|
Veremark
is an employment background checking software for checks such as
credit ratings and criminal records.
* The Investees are required only to submit Small Companies
Accounts to Companies House hence only net assets have been
disclosed.
|
|
Gameplan Technology Limited (Ryde)
|
|
|
|
|
|
|
Date of first
investment
|
Cost £
|
Valuation
£
|
Valuation
Method
|
Income recognised by TPV for
the year £'000
|
Equity Held by TPV
%
|
Other Equity Held by TPIM
managed funds %
|
|
27-Jul-2021
|
2,000,002
|
1,800,002
|
Cost
adjusted for fair-value
|
-
|
7.34%
|
-
|
|
|
|
|
|
|
|
|
|
Summary of Information from
Investee Company Financial Statements*:
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets as at 31 Dec
2022
Net assets as at 31 December
2021
|
|
1,409
2,368
|
|
|
|
Ryde provides a fully
integrated delivery management platform combining the best of fleet
management software, third party logistics software and a flexible
workforce to Ecommerce companies requiring deliveries.
* The Investees are required only to submit Small Companies
Accounts to Companies House hence only net assets have been
disclosed.
|
|
Vyne Technologies Limited
|
|
|
|
|
|
|
Date of first
investment
|
Cost £
|
Valuation
£
|
Valuation
Method
|
Income recognised by TPV for
the year £'000
|
Equity Held by TPV
%
|
Other Equity Held by TPIM
managed funds %
|
|
25-Nov-2019
|
1,752,185
|
1,584,809
|
Last
Equity Raise adjusted for fair value
|
-
|
7.95%
|
-
|
|
|
|
|
|
|
|
|
|
Summary of Information from
Investee Company Financial Statements*:
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets as at 31 Mar
2023
Net assets as at 31 Mar
2022
|
|
2,734
5,549
|
|
Vyne is a payments business
that uses Open Banking APIs to transfer money directly from the
bank accounts of consumers to the bank accounts of the online
merchants from which they are purchasing items or
services.
|
|
* The Investees are required only to submit Small Companies
Accounts to Companies House hence only net assets have been
disclosed.
|
|
Seechange Technologies Limited
|
|
|
|
|
|
|
Date of first
investment
|
Cost £
|
Valuation
£
|
Valuation
Method
|
Income recognised by TPV for
the year £'000
|
Equity Held by TPV
%
|
Other Equity Held by TPIM
managed funds %
|
|
26-Sep-2023
|
1,500,000
|
1,500,000
|
Cost
|
-
|
5.0%
|
-
|
|
|
|
|
|
|
|
|
|
Summary of Information from
Investee Company Financial Statements*:
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets as at 31 Dec
2022
Net assets as at 31 Oct
2021
|
|
(2,191)
188
|
|
|
|
SeeChange are building a
general-purpose recognition platform for real-world application of
computer vision, starting with use cases for retailers.
* The Investees are required only to submit Small Companies
Accounts to Companies House hence only net assets have been
disclosed.
|
|
Strategic Report -
ESG and Responsible Investing
Investment Manager approach to ESG and responsible
investing
Triple Point is founded on the
principle of people, purpose and profit. The manager strives to
identify and unlock investment opportunities that have purpose, so
we can help people and planet while generating profit for
investors.
Triple Point has committed to the
following frameworks to demonstrate commitment to responsible
investment:
· Triple Point is a certified B Corp with a score of 97.6.
Certified B Corporations are businesses that meet the highest
standards of verified social and environmental performance, public
transparency, and legal accountability to balance profit and
purpose.
· Triple Point is a signatory to the Principles for Responsible
Investment ("PRI"). This commitment was made in 2019 and requires
Triple Point to uphold and demonstrate progress on the six
principles which seek best practice in investor ESG integration and
contribution to a more sustainable global financial system. Triple
Point seeks to promote these principles throughout its business,
and they are reflected in its Sustainability Blue Book and annual
report of its sustainability approach and outcomes[6]. These principles ensure all investment processes
have sound and appropriate integration of ESG practice and are
overseen by the Sustainability Team who report findings to the
Triple Point Sustainability Group. This means investment teams are
aware of, and can make informed investments decisions about, key
ESG risks and opportunities.
· Triple Point is a signatory of the Net Zero Asset Managers
Initiative ("NZAM"). This is an international group of asset
managers committed to supporting the goal of net zero greenhouse
gas emissions. Triple Point has now set near-term science-aligned
net zero targets.
Triple Point recognise the
importance of strong governance in the successful and consistent
implementation of sustainability action. The Triple Point
Sustainability Group acts as the oversight body, with a dedicated
Sustainability Team responsible for implementation strategy and
support. The Sustainability Group comprises senior partners and
managers from across Triple Point, who meet twice a quarter. The
Group is chaired by Triple Point's Co-Managing Partner Ben Beaton.
Also reporting to this Group are the Sustainable Investment
Subgroup which comprises senior investment team members from across
Triple Point and is chaired by Triple Point's Head of
Sustainability. This subgroup shares best practice and learning in
sustainability and ESG integration from across the business, acting
as source of sustainability insight, collaboration and review which
stretches across the entire business.
In the view of the Sustainability
Group, successful ESG integration means:
· allocated resource at a strategy level to integrate, monitor
and report on ESG issues;
· integrating ESG considerations throughout investment
processes;
· ensuring decision-making captures ESG risks and
opportunities, learning from decisions and reporting to continually
enhance ESG integration;
· pro-actively engaging with investors to understand their ESG
requirements; and
· challenging systemic issues which slow uptake of ESG
practices by asking questions, offering alternative solutions, or
engaging at a policy level.
ESG Integration Approach for the Company
Overall business conduct (such as
alignment with best practice like the UK Bribery Act and UK Modern
Slavery Act) is assessed for all companies in the portfolio at the
point of investment, with continuing oversight from the Investment
Manager which ranges from board directors or observers to quarterly
or periodic business updates.
ESG Integration by the Investment Manager
The Investment Manager has also
implemented ESG Integration processes specifically associated to
the needs of understanding ESG risk and opportunity for small,
seed-stage companies.
We place proportionate
expectations on our investee companies, across a range of
environmental, social and governance factors according to the
sector, size, stage of growth, and future growth and development
trajectory of the company.
It is the Investment Manager's
belief that retrofitting a sustainable business mindset and model
can be time consuming and challenging further down the line. We
invest for growth and so we take a considered judgement that these
issues could come to bear during ownership or at exit, if they are
not considered at the point of investment.
The aim of the Company is to
invest in smaller UK businesses to help them grow, with the primary
objective of delivering strong financial returns. However, the
Company and the Investment Manager are increasingly mindful of the
impact that the activities and those of the businesses in which
they invest have not just on the environment, but also on their
employees, communities, and society at large.
The Company believes that its
investment activities have many positive benefits beyond the
returns it delivers for Shareholders. Our Venture Investments help
create new employment, develop and implement new technologies and
products, and improve productivity, all of which contribute to the
UK economy and benefit those employed in those businesses and in
their supply chains. This is achieved most effectively if the
company exhibits responsible business behaviour. The investment
team assesses this proportionately and materially depending on the
company size and sector, and the scale of the investment being
made, through an environmental, social and governance (ESG)
review.
In addition, some companies are
developing products and solutions which help to create a more
sustainable economy. We use the Sustainable Development Goals to
assess if companies we invest in offer this additional benefit. We
note this is not a selection criterion for the team, but it can
increase the appeal of an opportunity, alongside the other required
financial strengths.
The Investment Manager also
recognises that businesses can have negative impacts or contribute
to wider systemic issues which can create negative impact. The ESG
integration approach seeks to minimise risk to investments through
exposure to themes and activities which may impact the future
growth of a business, minimise negative impacts by seeking to avoid
businesses with poor business behaviours and maximise the potential
to support businesses which make positive contributions. The
strategy also explicitly states the Investment Manager will not
invest in adult content, gambling (excluding charitable lotteries
funding good causes or raising funds), animal testing,
controversial weapons and tobacco.
To ensure the effective and
consistent application of this approach, the Investment Manager
operates an ESG Integration Policy which details how ESG
considerations are taken into account throughout the investment
process, from the point of origination to exit. This policy is
available on the Tripe Point website[7]
and approaches the challenge through two themes:
1. Management
(Culture, Capacity & Governance) - this refers to the
allocation of appropriate resourcing, training and senior support
for ESG integration. It demonstrates that Triple Point's actions
have integrity and are aligned with the strategic position of the
Company and oversight from senior management. Examples of which
include:
a. training across the
investment team on ESG;
b. training for the
Investment Committee on ESG; and
c. providing greater
transparency on the approach to ESG.
2. Investment (Process & Reporting) - this refers to action
taken in the investment process to assess and improve ESG factors
affecting the target asset, how these might affect an investment
decision and how decisions and changes to ESG factors are captured
during our asset ownership. Examples include:
a. formal reviews by
the team of ESG trends and topics at a micro, macro and sector
level to feed into the origination process;
b. ESG due diligence
process with results included at Investment Committee;
and
c. sharing areas of
weakness, with constructive guidance on how to progress so
awareness on a range of ESG issues develops with
ownership.
Triple Point is committed to
evaluating the success of the approach. The investment teams report
to the Sustainability Group through an annual review process to
ensure adherence to the process. This ESG integration review, along
with on-going guidance to each investment team, is provided by
Triple Point's dedicated Sustainability Team.
Alignment to Sustainable Development Goals
("SDGs")
During the year we invested in a
number of businesses with sustainability alignment (as shown by
alignment to the SDGs), including:
SDG 3 - good health and wellbeing:
Virtual Science - an AI
platform delivering faster, clearer and more
actionable healthcare stakeholder insights to speed the delivery of
solutions from the life sciences industry; Abtrace - a health monitoring tool for
primary care providers to improve clinical decision making,
reduce variation in care and improve patient outcomes; Fertifa - an employer benefit business
specialising in reproductive healthcare.
SDG 7/13 - Affordable and clean
energy and climate action: Heat Geek
(formerly Skoon) - heat pump installer software
that helps heat engineers install high-efficiency heat pumps better
and faster.
The Strategic Report has been
approved by the Board and signed on their behalf by the
Chair.
Jane Owen
Chair
31 May 2024
GOVERNANCE
Board of
Directors
Jane Owen is the Chair of the
Board of the Company. After graduating in law from Oxford
University, Jane was called to the Bar in 1978 and until 1989 was a
practising barrister in the chambers that are now 3 Verulam
Buildings. Subsequently, Jane became UK group legal director at
Alexander & Alexander Services, and was appointed Aon's General
Counsel in the UK in 1997, a position she held until 2008, where
she was also a director of Aon Limited from 2001 to 2008. She was
also a Non-Executive Director of TWG Europe Ltd and related
companies and a Governor of James Allen's Girls' School.
Julian Bartlett has
significant financial, assurance and advisory experience gained
from over 30 years as a Partner at Grant Thornton UK LLP and
formerly at RSM Robson Rhodes and Deloitte. He has an extensive
understanding of listed and financial services companies including
VCTs. He is the Chair of Invesco Fund Managers Limited, and a
Director of Invesco Pensions Limited and Lindsell Train Limited. He
was formerly a Non-Executive Director of FFI Holdings plc from
August 2017 until it ceased trading on AIM in August 2019. Julian
is a Fellow of the Institute of Chartered Accountants in England
and Wales.
Jamie Brooke has gained over
25 years' investment experience throughout his career. He
previously worked at 3i and Quester in the venture and leveraged
buyout divisions, and was formerly lead fund manager for the
Hanover Catalyst Fund, prior to which he was at Lombard Odier
where, as a fund manager, he specialised in strategic UK small cap
equity investing, having moved with the Volantis team from
Henderson Global, and before that, Gartmore. Jamie has held
directorships on over 20 boards, and is currently on the Board of
Kelso Group Holdings plc, Flowtech Fluidpower plc and Chair of the
Audit Committee of Chapel Down Group plc, listed on the Aquis Stock
Exchange, and Oryx International Growth Fund.
Sam Smith is an entrepreneur
with over 25 years' business and capital markets experience and is
specialised in advising small and mid-cap growth companies. Sam was
previously Chief Executive Officer of FinnCap Group PLC which,
under her leadership, has become one of the largest brokers for
companies listed on the Alternative Investment Market ("AIM") of
the London Stock Exchange. Sam is currently a non-executive
director of Solid State PLC listed on AIM, Sumer Group Holdings Ltd
a professional services firm supporting SMEs with accounting and
other services, Griffin Markets Limited, an OTC wholesale European
energy trading business and of 55 Redefined Ltd.
Corporate Governance
Report
Compliance
Statement
The Board of Triple Point Venture
VCT plc has considered the principles and provisions of the
Association of Investment Companies Code of Corporate Governance
2019 ("AIC Code"). The AIC Code addresses the principles and
provisions set out in the UK Corporate Governance Code (the "UK
Code"), as well as setting out additional provisions on issues that
are of specific relevance to investment companies like Triple Point
Venture VCT Plc. It is acknowledged that the UK Code was updated in
January 2024 and it is anticipate the AIC Code will also be updated
accordingly. The Board will monitor this and report against the
update AIC Code once available.
The Board considers that reporting
against the principles and provisions of the AIC Code, which has
been endorsed by the Financial Reporting Council, will provide
improved reporting to Shareholders.
The Company has complied with the
principles and provisions of the AIC Code or provided an
explanation for non-compliance below:
AIC Code of Corporate Governance
|
Explanation
|
|
|
If the Chair of the Board is a member of the
Audit Committee, the Board should explain in the annual report why
it believes this is appropriate (Provision 29)
|
Jane Owen is a member of the Audit
Committee and Chair of the Board. Jane Owen is an independent
Non-Executive Director, and was deemed independent on appointment,
and therefore is permitted to be a member of the Committee under
provision 29 of the Code. Given the size and structure of the Board
it was also deemed in best interest of Shareholders to have the
breadth of experience of all Directors throughout the audit
process.
|
The AIC Code is available on the
AIC website (www.theaic.co.uk).
It includes an explanation of how the AIC Code adapts the
principles and provisions set out in the UK Code to make them
relevant for investment companies.
The Board
In identifying suitable candidates
for an appointment to the Board an independent external search
consultancy, Tyzack Partners Limited, was engaged for the
recruitment of a Non-Executive Director role during the period.
Following a formal recruitment process, Sam Smith was appointed to
the Board as Independent Non-executive Director on 8 February 2024.
Sam was also appointed as Senior Independent Non-executive Director
and member of the Audit Committee with effect from the same date.
Sam undertook a formal induction process upon joining the Board.
Following Sam's appointment, the Board comprised four Non-Executive
Directors. The Board confirms that there is no connection between
the Company, or any individual Directors and the external search
consultancy used for Director appointments during the period, or to
facilitate the candidate search for the role of Non-Executive
Director.
As announced on 8 February 2024,
following an orderly succession period, Jane Owen, Non-Executive
Director of the Company, will not stand
for re-election at the Company's AGM
expected to be held in July 2024 and will step down immediately
following the conclusion of the AGM when the Board will again
comprise three Non-Executive Directors. Jamie Brooke will be appointed as Non-Executive Chair of the
Board, immediately following completion of the AGM.
All Directors are considered
independent and day-to-day management responsibilities are
delegated to the Investment Manager. The Directors have a
combination of skills, experience and knowledge which are relevant
to the Company. Biographies of each director are presented on
page 44 of this
report.
The Directors are provided with
key information on the Company's activities, including regulatory
and statutory requirements, by the Investment Manager and Company
Secretary, Hanway Advisory Limited.
The Board has direct access to the
Company Secretary and may also take independent professional advice
at the Company's expense where necessary in the performance of
their duties. During the year, the Board was satisfied that all
Directors were able to commit sufficient time to discharge their
responsibilities effectively having given due consideration to
their other significant commitments. The
Directors were advised on appointment of the expected time required
to fulfil their roles and have confirmed that they remain able to
make that commitment. No external appointments accepted during the
year were considered to be significant for the relevant Directors,
taking into account the expected time commitment and nature of
these roles.
The Directors' other principal
commitments are listed on pages 44.
The Chair, Jane Owen, leads the
Board and is responsible for its overall effectiveness in directing
the affairs of the Company. The Chair leads the process in
determining its strategy and the achievement of its objectives. The
Chair is responsible for setting the Board agenda focusing on
strategy, performance, value creation, culture, stakeholders and
ensuring that issues relevant to these areas are reserved for Board
decision. The Chair facilitates constructive Board relations and
the effective contribution of all the Directors, encouraging a
culture of openness and debate and ensures the Directors receive
accurate, timely and clear information. The Chair does not have
significant commitments which conflict with her Board
responsibilities.
Appointment of New
Directors
Any appointment to the Board is
subject to a formal, rigorous and transparent procedure and is
based on merit and objective criteria which promotes diversity of
gender, social and ethnic backgrounds, cognitive and personal
strengths.
FCA Listing Rule diversity
targets
The following table sets out the
gender and ethnic diversity of the Board as at 29 February 2024, in
accordance with the FCA's Listing Rules, the disclosure of which in
this report having been approved by each of the
Directors
|
Number of Board members
|
Percentage of the Board
|
Number of senior positions of the Board[8]
|
Gender Diversity
|
Men
|
2
|
50%
|
0
|
Women
|
2
|
50%
|
2
|
Not specified/prefer not to
say
|
-
|
-
|
-
|
Ethnic Diversity
|
White British or other
White
(including minority white
groups)
|
4
|
100%
|
2
|
Mixed/Multiple Ethnic
Groups
|
-
|
-
|
-
|
Asian/Asian British
|
-
|
-
|
-
|
Black/African/Caribbean/Black
British
|
-
|
-
|
-
|
Other ethnic group, including
Arab
|
-
|
-
|
-
|
Not specified/prefer not to
say
|
-
|
-
|
-
|
The Company has reported against the Listing Rules on diversity and
has complied with the targets or otherwise explained non-compliance
below.
Requirement
|
Explanation
|
A minimum of one board member is
from a minority ethnic background
|
The size of the Company and of the
Board make achieving this target challenging. The Company recognise
the importance of this requirement and ensure that any recruitment
processes for Directors actively encourage a diverse pool of
candidates.
|
at least 40% of the Board are
women
|
As at the report date, the Company
is compliant due to recruitment of a fourth director in the period,
in line with Company succession planning. Following conclusion of
the Company's 2024 AGM, when Jane Owen is due to step down from the
Board, this target will no longer be met, as there will be three
Directors, with only one female director (33.3% of the Board). The
Board believes it has the appropriate mix of skills, knowledge and
experience to discharge its responsibilities and given the size of
the Company the appointment of an additional director would not be
deemed appropriate at this time.
|
Company's
Operations
The Board is responsible for
leading and controlling the Company and has oversight of the
management and conduct of the Company's business, strategy and
development. The Board determines the Investment Objectives and
Investment Policy and risk appetite and has overall responsibility
for the Company's activities, including review of investment
activity and performance.
The Board is also responsible for
the control and supervision of the Investment Manager (who is also
the Company's AIFM) and compliance with the principles and
recommendations of the AIC Code. The Board ensures the maintenance
of a sound system of internal controls and risk management
(including financial, operational and compliance controls) and
reviews the overall effectiveness of systems in place. The Board is
responsible for approval of any changes to the capital, corporate
and/or management structure of the Company.
The Investment Manager is
responsible for making investments in line with the Investment
Objectives, Investment Policy and Board approved risk appetite,
portfolio management and risk management of the Company pursuant to
AIFMD.
The Board's main focus is to
promote the long-term sustainable success of the Company, to
deliver value for Shareholders and contribute to wider society. The
Board does not routinely involve itself in day-to-day business
decisions but there is a formal schedule of matters that requires
the Board's specific approval, as well as decisions that can be
delegated to the Board Committees.
The key matters reserved to the
Board, include but are not limited to:
• review
investment performance and monitor compliance with the investment
policy;
• the
consideration and approval of future developments or changes to the
investment policy, including risk and asset allocation;
•
overall leadership of the Company and setting of
its purpose, culture, values and standards;
• approval
of any dividend or return of capital to be paid to the
Shareholders;
• the
appointment, evaluation, removal and remuneration of the Investment
Manager and the Company Secretary;
• Board
membership and powers including the appointment and removal of
Board members;
• ensuring
adequate Board succession planning;
•
ensuring the maintenance of a system of internal
controls and risk management;
• approval
and issue of the annual and half yearly results;
• review
of the Company's corporate governance arrangements and annual
review of continuing compliance with the AIC Code of Corporate
Governance published by the AIC from time to time;
• the
performance of the Company, including monitoring the net asset
value per share; and
•
monitoring Shareholder profiles and considering
Shareholder communications.
The Company Secretary is
responsible for ensuring that Board procedures are complied with,
advising the Board on all governance matters, supporting the Chair
and helping the Board and its committees to function effectively.
The Company Secretary will also provide the Board with support in
ensuring that it has the policies, processes, information, time and
resources it needs in order to function effectively.
The Company's articles of
association and the schedule of matters reserved to the Board for
decision provide that the appointment and removal of the Company
Secretary is a matter for the full Board.
The Board reviews the performance
of the Investment Manager annually taking into consideration the
contractual arrangements and scrutinises performance. The Board as
a whole carries out this review, and due to the size of the Board,
does not consider it appropriate to establish a separate management
engagement committee.
Discussions of the
Board
During the period, the following
were the key matters considered by the Board:
· approval of the change of AIFM arrangements of the Company,
and appointment of TPIM as the Company's AIFM;
· approval of Company policies;
· succession planning and appointment of Sam Smith and Jamie
Brooke as Non-Executive Directors;
· matters in relation to the Company's Offer for Venture
Shares;
· annual and half year reports to Shareholders;
· quarterly and, where applicable, ad hoc approval of NAVs;
and
· approval of dividends payable to Shareholders.
Re-election of
Directors
Directors' retirement and
re-election is subject to the Company's articles of association and
the AIC Code. The AIC Code requires that all Directors should be
subject to an annual re-election. In line with the Company's
succession plan, Jane Owen will not stand
for re-election at the Company's AGM expected to be held on 23 July
2024 and will step down immediately following the conclusion of the
AGM.
Independence of
Directors
The Board has a Non-executive
Chair and three other Non-executive Directors, all of whom were
considered independent since their appointment. All of the
Directors are independent of the Investment Manager.
The AIC Code outlines
circumstances that are likely to impair a Director's independence
including whether a Director has served on the Board for more than
nine years from the date of their first appointment. Jane
Owen has served on the Board for more than nine years. Length of service is
currently one of several indicators the Board considers when
assessing independence. The Board is of the view that a term of
service in excess of nine years does not in itself compromise
independence and notes the positive contribution that long service
can offer. The Board regularly reviews the independence of its
Directors and is satisfied that all Directors remain independent,
including in character and judgement. Jane Owen will step down from
the Board at the Company's 2024 AGM, and the three remaining
Directors will have served on the Board for less than nine
years.
Policy on Tenure of the
Chair
The Board considers that the
length of time each Director, including the Chair, serves on the
Board should not be limited and has not set a finite tenure policy.
Continuity, self-examination and ability to do the job are the
relevant criteria on which the Board assesses a Director's
independence. Length of service of current Directors and future
succession planning will be reviewed each year as part of the Board
evaluation process.
Succession Plan
The Board has aimed to achieve a
progressive refreshing of the Board, taking into account the
challenges and opportunities facing the Company, the balance of
skills and expertise, and the need for a diverse pipeline for
succession balanced against the benefit of historical knowledge.
The Board is pleased to have made positive progress on the gradual
refreshing of the Board this year through the appointment of Jamie
Brooke and Sam Smith during the period, in line with its succession
plan.
Board Committees
The Board has only one committee,
which is the Audit Committee. The Directors consider that due to
the size of the Board, there being no employees or executive
directors, it is not necessary to appoint a separate nomination
committee, management engagement committee or remuneration
committee, these functions being carried out by the full Board The
remuneration report is detailed on pages 57 to 61.
Board Meeting
Attendance
The Board has regular meetings on
a quarterly basis, with additional meetings as required from time
to time.
During the period the following
Board meetings were held and the number attended by each Director
compared with the maximum possible attendance:
Directors
|
Board
|
Audit
|
|
Meetings
|
Committee
|
Jane Owen, Chair
|
5/5
|
3/3
|
Julian Bartlett*
|
4/5
|
3/3
|
Chad Murrin**
|
1/1
|
1/1
|
Jamie Brooke***
|
4/4
|
2/2
|
Sam Smith****
|
1/1
|
1/1
|
*Julian Bartlett was unable to
attend all meetings due to illness.
**Chad Murrin stepped down from
the Board of the Company effective 19 July 2023.
***Jamie Brooke was appointed as
Non-Executive Director of the Company on 8 June 2023.
****Sam Smith was appointed as
Non-Executive Director of the Company effective 8 February
2024.
Performance Evaluation
The Board, led by the Chair,
established a formal process for a formal and rigorous annual
evaluation of the performance of the Board, individual Directors
and the Audit Committee. The evaluation considered the composition,
diversity, investment matters, development and how effectively each
member works together to achieve its objectives.
During the period, the Board
conducted a performance evaluation by completing a written
questionnaire to appraise and gather useful learnings on the
functioning of the Board, the Audit Committee and individual
Directors, and the Chair.
The Chair, supported by the
Company Secretary, acted on the results of the evaluation.
Having conducted its performance evaluation, the
Board believes that it has been effective in carrying out its
objectives and that each individual Director has been effective and
demonstrated commitment to the role.
The Board discussed the key
challenges and opportunities that were identified through the
performance evaluation and agreed appropriate development points on
which progress will be assessed in the next financial
period.
Challenges
|
2024 Development
Points
|
Finding sufficient time in
quarterly board meetings to give due consideration to longer term
Company strategy.
|
To organise a strategy day in
2025, to dedicate sufficient time to consider the Company's purpose
and strategy and to aid the Board in both short and long term
decision-making.
|
Significant changes to Board
composition during the period, and in the coming months.
|
As two new Directors have joined
the Board in the previous year, and Jane Owen is due to step down
from the Board at the upcoming AGM, the Board are encouraged to
dedicate time to developing the Board relationship to ensure
members are working together effectively both inside and outside of
quarterly meetings.
|
Change of Company Chair
|
The new proposed Chair, Jamie
Brooke, should meet with the Investment Manager and Company
Secretary in advance of taking on the role of Chair to discuss ways
of working and ensure a sufficient and smooth handover
process.
|
The progress the Board has made
against its 2023 development points is set out below:
2023 Development
points
|
Progress
Made
|
The Board will undertake a deep
dive into the risk management process to ensure enhanced risk
management to adequately monitor current and emerging risks facing
the Company.
|
During the period, enhanced risk
reporting was provided by the Investment Manager. The Board
reviewed and approved enhancements to the risk management framework
of the Company which became effective from March 2024. These
enhancements will underpin the approach to the identification and
categorisation of risks, together with changes to the assessment
approach - being more reflective of the individual nature of the
risks being considered.
|
Consideration will be given to
using an external search consultancy for the recruitment of a new
Board Director, in line with succession planning, to actively
encourage a diverse pool of candidates.
|
During the period, the recruitment
of a fourth Non-Executive Director, in line with the Company's
succession plan, was undertaken. An independent search consultancy,
Tyzack Partners, was used for the recruitment of Sam Smith as a
Director. The recruitment process encouraged a diverse pool of
candidates.
|
Director training to be held on
key legal, regulatory and governance issues facing the Company or
expected to impact the Company in the future.
|
During the period Director
training was held on a number of matters, including on Director's
responsibilities. Further training will be undertaken by the Board
on key issues impacting the Company in the future, and the general
Venture market.
|
Corporate Social
Responsibility
The Board is committed to
integrating ESG matters in the Company's business operations,
including the Company itself and the companies in which it invests.
The Board actively seeks ways to interact with their stakeholders.
The Board seeks to avoid investing in companies which do not
operate within ethical, environmental and social legislation.
Details on the Company's responsible investing can be found on
pages 41 to 42.
Internal Control and Risk
Management
The Board has overall
responsibility for establishing procedures to manage risk,
overseeing the internal control framework, determining the nature
and extent of the principal risks the Company is willing to take in
order to achieve its long-term strategic objectives, and
identifying emerging risks. The purpose of an internal control
framework is to ensure that proper accounting records are
maintained, the Company's assets are safeguarded, and the financial
information used within the business and for publication is
accurate and reliable; such a system can only provide reasonable
and not absolute assurance against material misstatement or loss.
Emerging risks are regularly monitored, and to the extent possible
or practicable, mitigating actions are
implemented.
The Company has put a process in
place for identifying, evaluating and managing the principal and
emerging risks it faces, and determining the nature and extent of
the principal risks the Company is willing to take in order to
achieve its long-term strategic objectives. During the year, the
Board satisfied itself that the procedures for identifying the
information needed to monitor the business and manage risk so as to
make proper judgements on the financial position and prospects were
robust. The purpose of an internal control framework is to ensure
that proper accounting records are maintained, the Company's assets
are safeguarded, and the financial information used within the
business and for publication is accurate and reliable; such a
system can only provide reasonable and not absolute assurance
against material misstatement or loss. Emerging risks are regularly
monitored, and to the extent possible or practicable, mitigating
actions are implemented.
The system of risk management and
internal control is designed to manage rather than eliminate the
risk of failure to achieve business objectives. As part of this
process an annual review of the risk management and internal
control systems is carried out. The review covers all material
controls including financial, operational and compliance
controls.
The Directors regularly review
financial results and investment performance with the Investment
Manager.
The Directors have established an
ongoing process designed to meet the particular needs of the
Company in evaluating the significant and emerging risks to which
it is exposed, including, among others, market risk, VCT qualifying
investment risk and operational risks, which are recorded in a risk
register. The controls employed to mitigate these risks are
identified and the residual risks are rated taking into account the
impact of the mitigating factors. The risk register is reviewed
bi-annually, along with the risk appetites. The principal risks and
uncertainties including emerging risks identified from the risk
register and a description of the Company's risk management
procedures can be found on pages 18 to 19.
The Directors regularly review the
system of internal controls, both financial and non-financial,
operated by the Company and the Investment Manager. The Investment
Manager is engaged to provide accounting services and the Company
Secretary provides secretarial services and retains physical
custody of the documents of title relating to
investments.
Capital management is monitored
and controlled by the Investment Manager. The capital being managed
includes equity and fixed interest VCT-qualifying investments, cash
balances and liquid resources including debtors and creditors. The
Investment Manager's procedures are subject to internal compliance
checks.
The Company's objectives when
managing capital are:
· to
safeguard its ability to continue as a going concern, so that it
can continue to provide returns to Shareholders and benefits for
other stakeholders;
· to
ensure sufficient liquid resources are available to meet the
funding requirements of its investments and to fund new investments
where identified.
Stakeholder Engagement
The Company continuously interacts
with a variety of stakeholders important to its success. This
includes regular
engagement with the Company's
Shareholders and other stakeholders by the Board and the Investment
Manager. The Directors are responsible for acting in a way that
they consider, in good faith, is the most likely to promote the
success of the Company for the benefit of its members. In doing so,
they have regard for the needs of stakeholders and the wider
society.
The Company is committed to
understanding the views of its stakeholders and maintaining
effective dialogue with its key stakeholders, which include:
Shareholders, investee companies; the Investment Manager; lenders;
and the wider communities in which the Company and its investee
companies operate.
Shareholders are encouraged to
attend and vote at the Company's Annual General Meeting, along with
the Company's other Shareholder meetings, so they can discuss
governance and strategy and the Board can enhance its understanding
of Shareholder views. The Board will attend the Company's
Shareholder meetings to answer any Shareholder questions and the
Chair will make herself available, as necessary, outside of these
meetings to speak to Shareholders.
The Board is committed to
providing investors with regular announcements of significant
events affecting the Company and its investee companies.
All investor documentation is
available to download from the Company's website:
https://www.triplepoint.co.uk/current-vcts/triple-point-venture-vct-plc/s2539/
Stakeholder engagement is set out
in the Section 172(1) statement on pages 22 to 23.
The Board has considered the AIC
Code recommendations in respect of arrangements by which staff of
the Investment Manager and Administrator may, in confidence, raise
concerns within their organisations about possible improprieties in
matters of financial reporting or other matters. It has concluded
that adequate arrangements are in place for the proportionate and
independent investigation of such matters and, where necessary, for
appropriate follow-up action to be taken within their
organisations.
Directors' Share
Interests
All of the Directors' Share
interests were held beneficially and they are actively encouraged
to own Shares. Details of the Directors' Share interests can be
found in the remuneration report on pages
57 to 61. The Company has not set out any
formal requirements or guidelines to Directors concerning their
ownership of Shares in the Company.
On behalf of the Board.
Jane Owen
Chair
31 May 2024
Audit Committee
Report
The following pages set out the
Audit Committee's report on how it has discharged its duties in
accordance with the AIC Code and its activities in respect of the
period ended 29 February 2024.
Julian Bartlett chairs the Audit
Committee. Jane Owen, Non-Executive Chair of the Board, who was
independent on appointment, is a member of the Audit Committee due
to the size and structure of the Board, along with Non-Executive
Directors Sam Smith and Jamie Brooke.
The Audit Committee deals with
matters relating to audit, financial reporting and internal control
systems. The Audit Committee meets at least twice a year and as
required. The Audit Committee also has direct access to BDO LLP,
the Company's external auditor.
The Audit Committee has been in
operation throughout the period and operates within clearly defined
terms of reference.
Audit Committee Role and
Responsibilities
The Audit Committee has the
primary responsibility for reviewing the financial statements and
the accounting principles and practices underlying them, liaising
with the external auditors and reviewing the effectiveness of
internal controls.
It should be noted that although
initial responsibility for valuations sits with the Investment
Manager as AIFM, the Audit Committee oversees the valuation
approach and its implementation. The Audit Committee's terms of
reference include the following roles and
responsibilities:
· periodically considering the need for an internal audit
function;
· monitor the integrity of the financial statements of the
Company and any formal announcements relating to the financial
performance and reviewing significant financial reporting
judgements contained in them;
· oversee the relationship with the external auditor including,
but not limited to, assessing annually their independence and
objectivity, taking into account relevant professional and
regulatory requirements and the overall relationship with the
auditor, including the provision of any non-audit
services;
· monitoring the extent to which the external auditor is
engaged to supply non-audit services;
· ensuring that the Investment Manager has arrangements in
place for the investigation and follow-up of any concerns raised
confidentially by staff in relation to propriety of financial
reporting or other matters;
· keep
under review the Company's internal financial controls and review
the adequacy and effectiveness of the Company's internal control
and risk management systems and monitor the proposed implementation
of such controls;
· report to the Board on significant issues relating to the
financial statements and how they were addressed; its assessment of
the effectiveness of the audit process; any key matters raised by
the external auditor; and any other issues on which the Board has
requested the Audit Committee's opinion; and
· report to the Board on how it has discharged its
responsibilities.
The Audit Committee reviews its
terms of reference and effectiveness annually and recommends to the
Board any changes required as a result of the review. The terms of
reference are available on request from the Company
Secretary.
In respect of the year ended 29
February 2024, the Audit Committee discharged its responsibilities
by:
· reviewing the external auditor's plan for the audit of the
financial statements, including identification of key risks and
confirmation of auditor independence;
· reviewing the external auditor's audit fees in relation to
the audit of the financial statements;
· monitoring the integrity of the financial statements of the
Company and any formal announcements relating to the Company's
financial performance, and reviewing significant financial
reporting judgements contained in them;
· reviewing the Company's internal financial controls and
internal control and risk management systems operated in relation
to the Company's business and assessing those controls in
minimising the impact of key risks;
· reviewing periodic reports on the effectiveness of TPIM's
internal control and risk management procedures;
· reviewing the appropriateness of the Company's accounting
policies;
· providing advice to the Board on whether the annual report
(and accounts), taken as a whole, is fair, balanced and
understandable, and provides the information necessary for
Shareholders to assess the Company's position and performance,
business model and strategy;
· reviewing the Company's annual and half-yearly results prior
to Board approval;
· making recommendations to the Board regarding the
reappointment of the external auditor and approving their
remuneration;
· reviewing and monitoring the external auditor's independence
and objectivity;
· reviewing the effectiveness of the external audit process,
taking into consideration relevant UK professional and regulatory
requirements;
· reviewing the Company's going concern and viability status;
and
· reviewing and discussing the external auditor's
findings.
The Committee has considered the
whole annual report and financial statements for the year ended 29
February 2024 and has reported to the Board that it considers them
to be fair, balanced and understandable, providing the information
necessary for shareholders to assess the Company's financial
position, performance, business model and strategy.
The Board considers that the
members of the Audit Committee collectively have the skills and
experience required to discharge their duties effectively and the
Audit Committee as a whole has competence relevant to the sector in
which it operates.
Internal controls
The Directors have overall
responsibility for keeping under review the effectiveness of the
Company's systems of risk management and internal controls. The
purpose of these controls is to make sure that proper accounting
records are maintained, assets are safeguarded and the financial
information used within the business and for publication is
accurate and reliable; such a system can only provide reasonable
and not absolute assurance against material misstatement or
loss.
The systems of risk management and
internal control are designed to manage rather than eliminate the
risk of failure to achieve the business objectives. These internal
controls have been in place throughout the period under review and
up to the date of this report. The Board regularly reviews
financial results and investment performance with the Investment
Manager. The Investment Manager identifies the investment
opportunities, monitors the portfolio of investments and manages
the assets of the Company on a discretionary basis.
The Investment Manager is engaged
to carry out the accounting function and retains physical custody
of the documents of title relating to unquoted investments. The
Directors confirm that they have established a continuing process
throughout the year and up to the date of this report for
identifying, evaluating and managing the significant potential
risks faced by the Company and have reviewed the effectiveness of
the risk management and internal control systems.
As well as there being controls
operated by the Investment Manager, the Company's depositary, INDOS
Financial Limited, are responsible for cash monitoring, asset
verification and oversight of the Company and the Investment
Manager in performing its function under the AIFMD. The Depositary
reports its findings on a quarterly basis to the Board on its
monitoring and verification of all new acquisitions, share
issues, loan facilities, shareholder distributions and other key
events. In addition, on an ongoing basis, the Depositary tests the
quarterly management accounts, bank reconciliations and performs a
quarterly review of the Group when discharging its
duties.
The Board does not consider it
appropriate to have an internal audit function due to the size and
nature of the Company's transactions. The risk management and
internal control systems include the production and review of bank
payments and management accounts. All outflows made from the
Company's accounts require the authority of two approved
signatories from the Investment Manager.
Financial Reporting
The primary role of the Audit
Committee in relation to financial reporting is to review with the
Investment Manager and Administrator and the Auditor, the
appropriateness of the annual report and financial statements,
concentrating on, amongst other matters:
· compliance with financial reporting standards and relevant
financial and governance reporting requirements;
· amendments to legislation and corporate governance reporting
requirements;
· the
impact of any new and proposed amendments to accounting standards
which affect the Company;
· material areas in which significant judgements have been
applied;
· whether the Audit Committee believes that proper and
appropriate processes and procedures have been followed in the
preparation of the annual report; and
· considering and recommending the contents of the annual
report and financial statements for approval.
Significant Issues Raised by the
Audit Committee
The Audit Committee is responsible
for considering and reporting on any significant issues that arise
in relation to the Financial Statements and how they have been
addressed.
The following key issues were
discussed:
· compliance with HM Revenue & Customs conditions for
maintenance of approved Venture Capital Trust status;
· valuation and existence of unquoted investments;
and
· Management override of financial controls.
Compliance with HMRC Conditions
The Investment Manager provides
the Board with regular qualifying investment updates. This report
shows the current qualifying percentage position of the Company and
highlights and actions which may be required to maintain this
position in the future. The Board also assesses the future
qualifying position of the Company with assumptions on divestment
of assets. The qualifying position of the Company is a recurring
agenda item at Board meetings.
The Company also has in place an
engagement with Philip Hare and Associates LLP. The Board seeks
their opinion before undertaking any material transaction which may
affect the qualifying status of the Company. The Company also seeks
the opinion of Shoosmiths LLP when making any new
Investments.
Valuation & Future Cash Flow
Projections
The Company's unquoted Investment
portfolio is valued in line with the International Private Equity
Valuation guidelines. The Company's accounting policy is to
classify investments at fair value through profit or loss.
Therefore, the most significant risk in the financial statements is
whether its investments are fairly valued. Being unquoted, there is
uncertainty and estimation involved in determining the investment
valuations.
There is also an inherent risk of
management override as the Investment Manager's fee is calculated
based on NAV as disclosed in note 6 to the financial statements.
The Investment Manager is responsible for calculating the NAV,
prior to approval by the Triple Point Valuation Committee, before
being submitted to the Board for approval.
On a quarterly basis, the
Investment Manager provides a detailed analysis of the NAV
highlighting any movements and assumption changes from the previous
quarter's NAV, including assessing any impact of macroeconomic
developments. This analysis and the rationale for any changes made
is considered and challenged and ultimately approved by the
Board.
Management override of Controls
The Committee reviews all
significant accounting estimates that form part of the financial
statements and considers any material judgements applied by
management during the completion of the financial
statements.
These issues were discussed with
the Investment Manager and the auditor at the conclusion of the
audit of the financial statements.
Going concern and viability
statement
The Board is required to consider
and report on the longer-term viability of the business as well as
assess the appropriateness of applying the going concern
assumption.
The Audit Committee has taken
account of the solvency and liquidity position of the Company shown
in the financial statements and the information provided by the
Investment Manager on the forecast cashflows for the Company and
expected pipeline. The Audit Committee considers that it is
appropriate to adopt the going concern basis of preparation of the
financial statements.
External Audit
It is the Audit Committee's
responsibility to monitor the performance, objectivity and
independence of the external auditors and this is assessed by the
Audit Committee each year. In evaluating BDO LLP's performance, the
Audit Committee examines effectiveness of the audit process,
independence and objectivity of the auditor, taking into
consideration the length of tenure of the external auditors, the
non-audit services undertaken during the year and relevant UK
professional and regulatory requirements, and the quality of
delivery of its services.
BDO LLP attended two of the three
formal Audit Committee meetings held during the year. Matters
typically discussed include the Auditor's assessment of the
transparency and openness of the Investment Manager, confirmation
that there has been no restriction in scope placed on them, the
independence of their audit and how they have exercised
professional scepticism.
When considering whether to
recommend the reappointment of the external auditor, the Audit
Committee takes into account their current fee compared to the
external audit fees paid by other similar companies. The quality
and competence of the external auditor is also taken into
consideration. The Audit Committee will then recommend to the Board
the appointment of an external auditor which is approved by
Shareholders at the Annual General Meeting.
The FRC's Ethical Standard
requires the audit partner to rotate every five years. BDO were
recommended for re-appointment at the 2023 AGM and the resolution
was duly passed. This is the audit partner, Elizabeth Hooper's
second year.
The independence and effectiveness
of the external audit process is assessed as part of the Board
evaluation conducted annually and by the quality and content of the
audit scoping and findings report provided to the Audit Committee
by the external auditor and the discussions then held on topics
raised. The Audit Committee will challenge the external auditor at
the Audit Committee meeting if appropriate.
Non-Audit Services
The Audit Committee safeguards the
objectivity and independence of the auditor by reviewing the nature
and extent of non-audit services supplied by the external auditor
to the Company. Details of fees paid to BDO LLP during the year are
disclosed in note 8 to the financial statements. There were no
non-audit services paid to BDO LLP during the year.
Audit Fee
The audit fee for the year was
£74,890 net of VAT (2023: £65,856). BDO LLP have primarily
attributed the increase in fees to inflation, the increased time
and complexity of audit given the growth of the Venture Shares and
wider general market fee increases for audit services. The
significant increase in fees have been considered, and the
Committee will evaluate all available options to ensure that the
cost for the services provided remain appropriate and in the best
interests of Shareholders.
Independence
The Audit Committee is required to
consider the independence of the external auditor. In fulfilling
this requirement, the Audit Committee has considered the Audit Plan
from BDO LLP which describes their arrangements to identify, report
and manage their independence.
Audit Committee Meeting
Attendance
During the period, the following
Audit Committee meetings were held, and the number attended by each
Director compared with the maximum possible attendance:
Directors
|
Audit
Committee
|
|
Meetings
|
Jane Owen, Chair
|
3/3
|
Julian Bartlett
|
3/3
|
Chad Murrin*
|
1/1
|
Jamie Brooke**
|
2/2
|
Sam Smith***
|
1/1
|
**Chad Murrin stepped down from
the Board of the Company effective 19 July 2023.
***Jamie Brooke was appointed as
Non-Executive Director of the Company on 8 June 2023.
****Sam Smith was appointed as
Non-Executive Director of the Company effective 8 February
2024.
The Audit Committee oversees the
Investment Manager's assessment of valuation of the unquoted
investments and the existence of those investments and considers
and challenges the information provided by the Investment
Manager. The Investment Manager will
usually have either Director or Board Observer rights to attend
portfolio companies' Board meetings, will always have information
rights when investments are first made and will maintain contact
with the senior executives of investees, and has oversight of all
the investments made. The Audit Committee has reviewed the
valuations and discussed them with both the Investment Manager and
the external auditor to confirm their assessment of the valuation
of the unquoted investments and the existence of those
investments.
The Investment Manager has
confirmed to the Audit Committee that the conditions for
maintaining the Company's status as an approved Venture Capital
Trust has been complied with throughout
the year. The position has been reviewed by Philip Hare &
Associates LLP in its capacity as adviser to the Company on
taxation matters.
The Audit Committee has considered
the whole Report and Accounts for the year ended 29 February 2024
and has reported to the Board that it considers them to be fair,
balanced and understandable providing the information necessary for
Shareholders to assess the Company's position, performance,
business model and strategy.
On behalf of the Board.
Julian Bartlett
Audit Committee Chair
31 May 2024
Directors' Remuneration
Report
Statement of the Chair
I am pleased to present the
Remuneration Report on behalf of the Board for the year ended 29
February 2024.
This report is submitted in
accordance with schedule 8 of the Large and Medium Sized Companies
and Groups (Accounts and Reports) (amendment) Regulations 2013 and
The Companies (Miscellaneous Reporting) Regulations 2018, in
respect of the year ended 29 February 2024. This report also meets
the Financial Conduct Authority's Listing Rules and describes how
the Board has applied the principles and provisions relating to
Directors' remuneration set out in the AIC Code. The reporting
requirements require two sections to be included:
· Directors' Remuneration Policy - This sets out our
Remuneration Policy for Directors of the Company that has been in
place since 19 July 2023 following approval by
Shareholders.
· Annual Remuneration Report - This
sets out how our Directors were paid for the period ended 29
February 2024. There will be an advisory Shareholder vote on this
section of the report at our 2024 AGM.
We value engagement with our
Shareholders and for the constructive feedback we receive and look
forward to your support at the forthcoming AGM.
Jane Owen
Chair
31 May 2024
Directors' Remuneration
Policy
Remuneration Policy
Overview
The Board currently comprises four
Directors, all of whom are Non-Executive. The Board's policy is
that the remuneration of Non-Executive Directors should reflect the
experience of the Board as a whole, be fair and be comparable with
that of other relevant Venture Capital Trusts that are similar in
size and have similar investment objectives and structures.
Furthermore, the level of remuneration should be sufficient to
attract and retain the Directors needed to oversee the Company
properly and to reflect the specific circumstances of the Company,
the duties and responsibilities of the Directors and the value and
amount of time committed to the Company's affairs. The articles of
association provide that the Directors shall be paid in aggregate a
sum not exceeding £100,000 per annum. None of the Directors are
eligible for bonuses, pension benefits, Share options, long-term
incentive schemes or other benefits in respect of their services as
Non-Executive Directors of the Company. There are no planned
changes to the Remuneration Policy last approved by Shareholders at
the 2023 AGM.
Consideration of
Remuneration
The Board does not have a separate
Remuneration Committee, as the Company has no employees or
executive directors. The Board has not retained external advisers
in relation to remuneration matters but has access to information
about Directors' fees paid by other companies of a similar size and
type. As such, the Board as a whole will consider the remuneration
of the Directors, however no director is involved in determining
their own remuneration. The Board will review the remuneration of
the Directors in line with the VCT industry on an annual basis, if
thought appropriate. Otherwise, only a change in responsibilities
is likely to incur a change in remuneration of any one Director or
the remuneration policy itself.
Directors' Service
Contracts
The Directors are engaged under
letters of appointment and do not have service contracts with the
Company.
Directors' Term of
Office
The Directors' letters of
appointment provide for three months written notice to be given by
either party. Each Director will be
subject to annual re-election by Shareholders at the Company's
Annual General Meeting in each financial year.
Policy on Payment for Loss of
Office
A Director who ceases to hold
office is not entitled to receive any payment other than accrued
fees (if any) for past services.
Consideration of Shareholder
Views
The Company is committed to
ongoing Shareholder dialogue and takes an active interest in voting
outcomes. Where there are substantial votes against resolutions in
relation to Directors' remuneration, the Company will seek the
reasons for any such vote and will detail any resulting actions in
the Directors' Remuneration Report. No views which are relevant to
the formulation of the Directors' remuneration policy have been
expressed to the Company by Shareholders, whether at a general
meeting or otherwise.
Future Policy Table
The Directors are entitled only to
the fees as set out in the table below. No element of Directors'
remuneration is subject to performance factors. There are no other fees payable to the Directors for
additional services outside of their contracts.
Component
|
How it Operates
|
Maximum Fee
|
Link to Strategy
|
Provisions to Recover or Withhold Sums
|
Annual Fee
|
Each Director receives a basic fee
which is paid on a quarterly basis.
|
The total aggregate fees that can
be paid to the Directors is calculated in accordance with the
articles of association.
|
The level of the annual fee has
been set to attract and retain high calibre Directors with the
skills and experience necessary for the role. The fee has been
benchmarked against companies of a similar size.
|
There are no provisions to recover
or withhold sums.
|
Other benefits
|
The Directors shall be entitled to
be repaid expenses.
|
Article 89 of the Company's
Articles of Association permits for any director to be repaid
reasonable expenses incurred in attending or returning from
meetings of the Board, committees of the Board or Shareholder
meetings or otherwise in connection with the performance of their
duties as Directors of the Company.
|
In line with market practice, the
Company will reimburse the Directors for expenses to ensure that
they are able to carry out their duties effectively.
|
Annual Remuneration
Report
Directors' Fees
Details of each Director's
contract is shown below. The Audit Committee Chair is entitled to
an additional £2,000 and the Chair is paid an additional £5,000 to
reflect the additional responsibilities of their role.
|
|
|
|
|
Date of
Contract
|
Unexpired term of
contract
|
Annual rate of Directors'
fees*
|
Policy on payment for loss
of office
|
|
|
|
£
|
|
Jane Owen, Chair
|
23-Sep-10
|
none
|
25,000
|
none
|
Chad Murrin*
|
23-Sep-10
|
none
|
20,000
|
none
|
Julian Bartlett
|
08-Feb-22
|
none
|
22,000
|
none
|
Jamie Brooke
|
08-Jun-23
|
none
|
20,000
|
none
|
Sam Smith
|
08-Feb-24
|
none
|
20,000
|
none
|
*Chad Murrin stepped down as a
Non-Executive Director of the Company on 19 July 2024.
Single Total Figure (audited
information)
The fees paid to Directors in
respect of the year ended 29 February 2024 and the prior year are
shown below:
|
Emoluments for the year ended 29 February
2024*
|
%
Change from 2023-2024
|
Emoluments for the year ended 28 February
2023
|
%
Change from 2022-2023
|
Emoluments for the Year ended 28 February
2022
|
%
Change from 2021-2022
|
Emoluments for the Year ended 28 February
2021
|
%
Change from 2020-2021
|
Emoluments for the Year ended 29 February
2020
|
|
£
|
%
|
£
|
%
|
£
|
%
|
£
|
%
|
£
|
Jane Owen, Chair
|
25,000
|
4
|
24,000
|
7
|
22,500
|
-
|
22,500
|
-
|
22,500
|
Chad Murrin*
|
7,778
|
n/a
|
19,000
|
6
|
18,000
|
-
|
18,000
|
-
|
18,000
|
Julian Bartlett
|
22,000
|
8
|
20,300
|
n/a
|
1,038
|
n/a
|
n/a
|
n/a
|
n/a
|
Tim Clarke*
|
-
|
n/a
|
6,600
|
n/a
|
18,000
|
-
|
18,000
|
-
|
18,000
|
Jamie Brooke**
|
14,762
|
n/a
|
-
|
n/a
|
-
|
n/a
|
-
|
n/a
|
-
|
Sam Smith**
|
1,260
|
n/a
|
-
|
n/a
|
-
|
n/a
|
-
|
n/a
|
-
|
|
70,800
|
|
69,900
|
|
59,538
|
|
58,500
|
|
58,500
|
Employer's NI
contributions
|
754
|
|
250
|
|
-
|
|
435
|
|
1,499
|
Total emoluments
|
71,554
|
|
70,150
|
|
59,538
|
|
58,935
|
|
59,999
|
None of the Directors are eligible
for bonuses, pension benefits, share options, long-term incentive
schemes or other benefits in respect of their services as
Non-Executive Directors of the Company.
* Chad
Murrin and Tim Clarke stepped down from their positions as
Non-Executive Directors on 19 July 2023 and 14 July 2022,
respectively.
** Jamie Brooke and Sam Smith were
appointed as Non-Executive Directors effective 8 June 2023 and 8
February 2024, respectively.
Information required on executive
Directors, including the Chief Executive Officer and employees has
been omitted because the Company has neither and therefore it is
not relevant.
Directors' emoluments compared to
payments to Shareholders:
|
|
29 February
2024
|
28 February
2023
|
|
|
£'000
|
£'000
|
|
|
|
|
Total Dividends
paid/payable
|
1,075
|
8,123
|
Total Directors'
emoluments
|
72
|
70
|
|
|
|
|
Directors' Share Interests
(audited information)
At 29 February 2024, Jane Owen
held 94,534 Venture Shares (2023: 82,563 Venture Shares, 24,624 A
Shares, 24,378 B Shares), Julian Bartlett held 56,861 Venture
Shares (2023: 36,413 Venture Shares), and Jamie Brooke and Sam
Smith held nil Venture Shares as at 29 February 2024 (2023:
nil).
No other connected parties to the
Directors held any Shares at 29 February 2024 (2023:
nil). Any Shares owned by the Directors
were purchased at the same price offered to investors. There are no
requirements or restrictions on Directors holding Shares in the
Company.
Company Performance
The following performance charts compare the
Total Return of the Venture Share Class over the period from 1
March 2017 to 29 February 2024 with the Total Return from notional
investments in the FTSE All-Share index and FTSE Small-Cap index
over the same period. The indices chosen are considered to be the
most appropriate broad equity markets for comparative
purposes.
Investors should be reminded that Shares in
Venture Capital Trusts generally continue to trade at a discount to
the NAV of the Company.
The Total Return does not include the initial
30% tax relief available to investors.
These charts have been prepared
in accordance with Part 3 to Schedule 8 of the Companies Act 2006.
The Company measures its performance against its target returns as
detailed in the Strategic Report.
As highlighted above, the charts do not take
into account the tax benefit of investing in a VCT.
Statement of Voting at the Annual
General Meeting
The resolutions to approve the Directors'
Remuneration Report and Directors' Remuneration Policy were passed
at the Annual General Meeting on 19 July 2023. Details of the proxy
votes in respect of the resolutions are as set out
below:
|
Voting for
|
Voting Against
|
Vote Withheld
|
Remuneration Report
|
99.79%
|
0.21%
|
0.03%
|
Remuneration Policy
|
97.51%
|
2.49%
|
0.03%
|
During the year, the Company did
not receive any communications from Shareholders specifically
regarding Directors' pay.
On behalf of the Board.
Jane Owen
Chair
31 May 2024
Directors' Report
The Directors are pleased to
present the Directors' Report for the year ended 29 February
2024.
The information that fulfils the
requirements of the Corporate Governance statement in accordance
with rule 7.2 of the DTR can be found in this Directors' report on
page 62 to 65 and in the Corporate Governance report on
pages 43 to 52 all of which is incorporated into this Directors' report by
reference.
Directors
The Directors of the Company
during the year were Jane Owen, Chad Murrin, Julian Bartlett, Jamie
Brooke and Sam Smith. Chad Murrin stepped down as Non-Executive
Director on 19 July 2023.Jamie Brooke and Sam Smith were appointed
to the Board on 8 June 2023 and 8 February 2024
respectively.
Principal Activity and
Status
The principal activity of the
Company is that of a Venture Capital Trust ("VCT") and its main
activity is venture capital investment and management.
The Company has been approved as a
VCT by HMRC, in accordance with Section 274 of the Income Tax Act
2007 and, in the opinion of the Directors, has conducted its
affairs so as to enable it to continue to obtain such approval. In
order to maintain its status under VCT legislation, a VCT must
comply on a continuing basis with the provisions of Section 274 and
further details can be found on page 62.
The Company is registered in
England as a Public Limited Company (Registration number 07324448)
and its Shares are listed on the main market of the London Stock
Exchange.
The Company was not at any time up
to the date of this report a close company within the meaning of
S439 of the Corporation Tax Act 2010.
Post Balance Sheet
Events
Details of post balance sheet
events can be seen in note 25 to the Financial
Statements.
Directors' indemnity
The Company has indemnified
Directors against certain liabilities within its Articles of
Association which may be incurred in the execution of their office.
This indemnity remains in force as at the date of this report and
will also indemnify any new directors that join the Board. The
Company has, as permitted by Section 233 of the Companies Act 2006,
maintained insurance cover on behalf of the Directors and Company
Secretary, indemnifying them against certain liabilities which may
be incurred by them in relation to the execution of their
duties.
Research and
Development
No expenditure on research and
development was made during the year (2023: Nil).
Management arrangements
TPIM acts as Investment Manager to
the Company and has done since incorporation, and as AIFM to the
Company effective 12 September 2023.
To align its interests with
Shareholders, TPIM earns a performance fee for the Venture Share
Class if the total return (Net Asset Value plus distributions made)
to holders of the Venture Shares exceeds their net initial
subscription price by an annual threshold of 3% per annum,
calculated on a compound basis. To the extent that the total return
exceeds the threshold over the relevant period then a performance
incentive fee of 20% of the excess is payable to TPIM. In addition,
TPIM earned a performance fee for the A Share Class of 20% on
distributions exceeding 100 pence per Share. The other principal
terms of the Company's management agreement with TPIM are set out
in note 6 to the Financial Statements.
The Board has evaluated the
performance of the Investment Manager and reviewed the management
contract. As required by the Listing Rules, the Directors confirm
that in their opinion the continuing appointment of TPIM as
Investment Manager on the terms agreed is in the best interests of
the Shareholders as a whole. In reaching this conclusion the
Directors have taken into account the performance of the Company,
and the service provided by TPIM to the Company.
Substantial
Shareholdings
As at the date of this report no
disclosures of major shareholdings had been made to the Company
under Disclosure and Transparency rule 5 (Vote Holder and Issuer
Notification Rules).
Share Price Discount
Policy
The Company has a share buy-back
facility, allowing the buy back of Shares at no more than a 5%
discount to the prevailing NAV, subject to the Directors'
discretion, and within limits approved by Shareholders at the AGM.
Shareholders should note that if they sell their Shares within five
years of subscription, they forfeit any tax relief obtained. If you
are considering selling your Shares, please contact the Investment
Manager on 020 7201 8989.
Purchase of Own Shares
During the year, the Company
purchased for cancellation 18,138 Venture Shares.
The Directors may exercise on
behalf of the Company its powers to purchase its own Shares to the
extent permitted by Shareholders and the articles of
association.
Streamlined Energy and Carbon
Reporting
The Company has outsourced
operations to third parties and has no significant greenhouse gas
emissions from its direct operations and so qualifies as a low
energy user at under 40,000kWh and is therefore exempt from
disclosures on greenhouse gas emissions and energy
consumption.
During the year under review, the
Company had investments in renewable energy, through its investment
in a hydroelectric company. It also had investments in two
companies which operate gas fired energy centres which have now
been exited.
Share Capital
As at 29 February 2024 the
Company's issued Share capital amounted to 63,113,620, Venture
Shares of 1p each. As at that date none of the issued Shares were
held by the Company as treasury Shares.
As at 29May 2024 the Company's
issued Share capital amounted to 71,243,862 Venture Shares of 1p
each. As at that date none of the issued Shares were held by the
Company as treasury Shares.
There are no restrictions on the
transfer of securities in the Company other than the Company's
Share Dealing Code and other certain restrictions which may be
impaired by law, for example, the Market Abuse
Regulation.
The Company is not aware of any
agreements between holders of securities that may result in
restrictions on transferring securities in the Company. There are
no securities of the Company carrying special rights with regards
to the control of the Company in issue.
Annual General Meeting
The 2024 annual general meeting
will be held on 23 July 2024.
Amendment of Articles of
Association
The Company's articles of
association may be amended by the members of the Company by special
resolution (requiring a majority of at least 75% of the persons
voting on the relevant resolution).
Appointment and Replacement of
Directors
A person may be appointed as a
Director of the Company by the Shareholders in general meeting by
ordinary resolution (requiring a simple majority of the persons
voting on the relevant resolution) or by the Directors. No person,
other than a Director retiring by rotation or otherwise, shall be
appointed or re-appointed a Director at any general meeting unless
he is recommended by the Directors or, not less than seven nor more
than 42 clear days before the date appointed for the meeting,
notice is given to the Company of the intention to propose that
person for appointment or re-appointment in the form and manner set
out in the Company's articles of association.
Each Director who is appointed by
the Directors (and who has not been elected as a Director of the
Company by the members at a general meeting held in the interval
since his appointment as a Director of the Company) is to be
subject to election as a Director of the Company by the members at
the first Annual General Meeting of the Company following his or
her appointment. Thereafter all Directors are subject to
re-election at each Annual General Meeting of the
Company.
A person also ceases to be a
Director if he or she resigns in writing, ceases to be a Director
by virtue of any provision of the Companies Act 2006, becomes
prohibited by law from being a Director, becomes bankrupt or is the
subject of a relevant insolvency procedure, or becomes of unsound
mind, or if the Board so decides following at least six months'
absence without leave or if he or she becomes subject to relevant
procedures under the mental health laws, as set out in the
Company's articles of association.
Powers of the Directors
Subject to the provisions of the
Companies Act, the memorandum and articles of association of the
Company and any directions given by Shareholders by special
resolution, the articles of association specify that the business
of the Company is to be managed by the Directors, who may exercise
all the powers of the Company, whether relating to the management
of the business or not.
Conflicts of Interests
The Directors review the
disclosure of conflicts of interest quarterly, with changes
reviewed and noted at the beginning of each Board meeting. A
Director who has a potential conflict of interest has the interest
authorised and acknowledged by the Board. Procedures to disclose
and authorise conflicts have been adhered to throughout the
year.
Directors'
Responsibilities
The Directors confirm
that:
· so
far as each of the Directors is aware there is no relevant audit
information of which the Company's auditor is unaware;
and
· the
Directors have taken all steps that they ought to have taken as
Directors in order to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that
information.
Auditor
BDO LLP is the appointed auditor
of the Company and offer themselves for reappointment. In
accordance with section 489 (4) of the Companies Act 2006 a
resolution to reappoint BDO LLP as auditor and to authorise the
Directors to fix their remuneration will be proposed at the
forthcoming Annual General Meeting.
Going Concern
After making the necessary
enquiries, the Directors confirm that they are satisfied that the
Company has adequate resources to continue in business for at least
the next 12 months from the date of approval of these financial
statements to 31 May 2025. The Board receives regular reports from
the Investment Manager, and the Directors believe that, as no
material uncertainties leading to significant doubt about going
concern have been identified, it is appropriate to continue to
apply the going concern basis in preparing the Financial
Statements. Further information on the Going Concern of the Company
can be found in the Strategic report on pages 4 to 41and note 2 to
the financial statements on page 82.
Annual Report
The Board is of the opinion that
the Annual Report, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
Shareholders to assess the position, performance, strategy and
business model of the Company.
The Board recommends that the
Annual Report, the Report of the Directors and the Independent
Auditor's Report for the year ended 29 February 2024 are received
and adopted by the Shareholders. A resolution concerning this will
be proposed at the forthcoming Annual General Meeting.
VCT Regulation
The Investment Policy is designed
to ensure that the Company continues to qualify and is approved as
a VCT by HMRC. In order to maintain its status under Venture
Capital Trust legislation, a VCT must comply on a continuing basis
with the provisions of section 274 of the Income Tax Act 2007 as
follows:
(1) the Company's income
must be derived wholly or mainly from shares and
securities;
(2) at least 80% of the HMRC
value of its investments must have been represented throughout the
year by shares or securities that are classified as "qualifying
holdings";
(3) at least 70% by HMRC
value of its total qualifying holdings must have been represented
throughout the year by holdings of "eligible shares";
(4) at least 30% of funds
raised in each accounting period must be invested in qualifying
holdings by the anniversary of the end of the accounting period in
which funds were raised;
(5) at the time of
investment, or addition to an investment, the Company's holdings in
any one company must not have exceeded 15% by HMRC value of its
investments;
(6) the Company must not
have retained greater than 15% of its income earned in the year
from shares and securities;
(7) the Company's shares
throughout the year must have been listed on a regulated European
market;
(8) an investment in any
company must not cause that company to receive more than £5 million
in State aid risk finance in the 12 months up to date of the
investment, nor more than £12 million in total (the limits are £10
million and £20 million respectively for a "knowledge intensive"
company);
(9) the Company must not
invest in a company whose trade is more than seven years old (ten
years for a "knowledge intensive" company) unless the company
previously received State and risk finance in its first seven
years, or the company is entering a new market and a turnover test
is satisfied;
(10) the Company's investment in a
company must not be used to acquire another business, or shares in
another company; and
(11) the Company may only make
qualifying investments or certain non-qualifying investments
permitted by section 274 of the Income Tax Act 2007.
Environment
The management and administration
of the Company is undertaken by the Investment Manager. TPIM
recognises the importance of its environmental responsibilities,
monitors its impact on the environment, and designs and implements
policies to reduce any damage that might be caused by its
activities. Initiatives designed to minimise the Company's impact
on the environment include recycling and reducing energy
consumption.
Anti-bribery Policy
The Company will not tolerate
bribery under any circumstances in any transaction in which the
Company is involved.
TPIM reviews the anti-bribery
policies and procedures of all portfolio companies.
Environmental, Social, Employee
and Human Rights Issues
As the Company has no employees,
it does not maintain specific policies in relation to these
matters. Due to the nature of the Company's activities, there being
no employees and only four Non-Executive Directors, there are no
Human Rights issues to report. Its investment in a company engaged
in energy generation from renewable sources contributed to a
reduction in carbon emissions.
Diversity
The Board of Directors comprises
two female and two male Directors.
The Company does not have any
employees or office space. As such the Company does not operate a
diversity policy with regards to any administrative, management and
supervisory functions.
Employees
The Company has no employees and
accordingly has no requirement to separately report on this
area.
The Investment Manager is an equal
opportunities employer who respects and seeks to empower each
individual and the diverse cultures, perspectives, skills and
experiences within its workforce. The Investment Manager places
great importance on company culture and the wellbeing of its
employees and considers various initiatives and events to support a
positive work environment.
Investment and
Co-Investment
The Company may co-invest with
other funds managed by TPIM.
Matters Covered in the Strategic
Report
The information that fulfils the
reporting requirements relating to the following matters can be
found on the pages identified.
Matter
|
Page Reference
|
Future Developments
|
4 to 11
|
Financial risk management
objectives
|
94 to 96
|
Information on exposure to price
risk, liquidity risk and cashflow risk
|
18 to 19
|
Jane Owen
Chair
31 May 2024
Information Disclosures
under the AIFM Directive
The Company AIFM, Triple Point
Investment Management LLP, is authorised by the FCA under the
AIFM directive. The Company is an Alternative Investment Fund
("AIF") managed
by the AIFM.
The Triple Point Group has an
established Remuneration Policy which applies to all staff of
Triple Point Investment Management LLP (the AIFM of the
Company). The purpose of this policy is to ensure that the
remuneration of its staff complies with various rules and
regulations in place, including the AIFMD Remuneration Code (which
can be located in SYSC 19B) (the "Code"), is consistent with and
promotes sound and effective risk management and does not encourage
risk-taking which is inconsistent with the risk profiles, rules or
instruments of incorporation of the AIFM and the AIFs it
manages.
Employee remuneration disclosure
The table below provides an
overview of the following for all staff that carry out activities
for or on behalf of the Company:
· The
total amount of remuneration for the financial year, split into
fixed and variable remuneration, including the number of
staff.
· The
aggregate amount of remuneration for, and the number of Code
Staff.
The AIFM has calculated the
proportionate amount of relevant staff's remuneration who carry out
activities for the AIF.
Total Remuneration
|
Headcount
|
Remuneration
(£)
|
Fixed
remuneration
|
31
|
1,019,446
|
Variable remuneration
|
26
|
448,102
|
Code Staff
Remuneration
|
Headcount
|
Remuneration
(£)
|
Fixed
remuneration
|
6
|
240,027
|
Variable remuneration
|
4
|
300,655
|
Directors' Responsibility
Statement
The Directors are responsible for
preparing the Annual Report and the financial statements in
accordance with UK adopted international accounting standards and
applicable law and regulations.
Company law requires the Directors
to prepare financial statements for each financial year. Under that
law the Directors are required to prepare the Company financial
statements in accordance with UK adopted international accounting
standards. Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company and of
the profit or loss for the Company for that period.
In preparing these financial
statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make
judgements and accounting estimates that are reasonable and
prudent;
· state whether they have been prepared in accordance with UK
adopted international accounting standards, subject to any material
departures disclosed and explained in the financial
statements;
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business;
· prepare a Directors' report, a strategic report and
Directors' remuneration report which comply with the requirements
of the Companies Act 2006.
The Directors are responsible for
keeping adequate accounting records that are sufficient to show and
explain the company's transactions and disclose with reasonable
accuracy at any time the financial position of the company and
enable them to ensure that the financial statements comply with the
Companies Act 2006.
They are also responsible for
safeguarding the assets of the company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities. The Directors are responsible for ensuring
that the Annual Report and accounts, taken as a whole, are fair,
balanced, and understandable and provides the information necessary
for Shareholders to assess the Company's performance, business
model and strategy.
The Directors are responsible for
ensuring the Annual Report and the financial statements are made
available on a website. Financial statements are published on the
Company's website in accordance with legislation in the United
Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Company's website is the
responsibility of the Directors. The Directors' responsibility also
extends to the ongoing integrity of the financial statements
contained therein.
The Directors have delegated the
hosting and maintenance of the Company's website content to the
Investment Manager and its materials are published on the Triple
Point website www.triplepoint.co.uk.
Directors' responsibilities pursuant to
DTR4
The Directors confirm to the
best of their knowledge:
· the
financial statements have been prepared in
accordance with the applicable set of
accounting standards, give a true and fair
view of the assets, liabilities, financial position and
profit and loss
of the Company; and
· the Annual Report
includes a fair review of the development and
performance of the business and the financial position of the Company,
together with a description of the principal risks and
uncertainties that they
face.
On behalf of the
Board.
Jane Owen
Chair
31 May 2024
Statement of Comprehensive
Income
For the year ended 29 February 2024
|
|
29 February
2024
|
|
28 February
2023
|
|
Note
|
Revenue
|
Capital
|
Total
|
|
Revenue
|
Capital
|
Total
|
|
|
£'000
|
£'000
|
£'000
|
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
|
Investment income
|
5
|
682
|
-
|
682
|
|
213
|
-
|
213
|
Gains on investments
|
12
|
-
|
261
|
261
|
|
-
|
187
|
187
|
|
|
|
|
|
|
|
|
|
Investment return
|
|
682
|
261
|
943
|
|
213
|
187
|
400
|
|
|
|
|
|
|
|
|
|
Investment management
fees
|
6
|
102
|
922
|
1,024
|
|
113
|
1,014
|
1,127
|
Other expenses
|
7
|
704
|
-
|
704
|
|
638
|
-
|
638
|
|
|
|
|
|
|
|
|
|
|
|
806
|
922
|
1,728
|
|
751
|
1,014
|
1,765
|
|
|
|
|
|
|
|
|
|
Loss before taxation
|
|
(124)
|
(661)
|
(785)
|
|
(538)
|
(827)
|
(1,365)
|
|
|
|
|
|
|
|
|
|
Taxation
|
10
|
-
|
-
|
-
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Loss after taxation
|
|
(124)
|
(661)
|
(785)
|
|
(538)
|
(827)
|
(1,365)
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income
|
|
-
|
-
|
-
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss
|
|
(124)
|
(661)
|
(785)
|
|
(538)
|
(827)
|
(1,365)
|
|
|
|
|
|
|
|
|
|
Basic & diluted (loss)/earnings per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A Shares (wound down)
|
|
-
|
-
|
-
|
|
0.10p
|
(2.93p)
|
(2.83p)
|
|
|
|
|
|
|
|
|
|
B Shares (wound down)
|
|
-
|
-
|
-
|
|
(1.44p)
|
33.75p
|
32.31p
|
|
|
|
|
|
|
|
|
|
Venture Shares
|
11
|
(0.23p)
|
(1.23p)
|
(1.46p)
|
|
(1.17p)
|
(7.30p)
|
(8.47p)
|
The total column of this statement
is the Statement of Comprehensive Income of the Company prepared in
accordance with UK-adopted International Accounting Standards
(IAS). The supplementary revenue return and capital columns have
been prepared in accordance with the Association of Investment
Companies Statement of Recommended Practice ("AIC SORP" updated
July 2022) in so far as it does not conflict with IAS.
All revenue and capital items in
the above statement derive from continuing operations.
The Company has only one class of business and
derives its income from investments made in shares and securities
as well as from bank deposits and money market funds.
The accompanying notes on pages 82
to 97 form an integral part of these statements.
Statement of Financial
Position
At 29 February 2024
Company No: 07324448
|
|
29 February
2024
|
|
28 February
2023
|
|
Note
|
£'000
|
|
£'000
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
Financial assets at fair value
through profit or loss
|
12
|
43,824
|
|
31,979
|
|
|
|
|
|
Current assets
|
|
|
|
|
Receivables
|
14
|
356
|
|
667
|
Cash and cash
equivalents
|
15
|
18,199
|
|
18,222
|
Deferred proceeds
|
|
300
|
|
-
|
|
|
18,855
|
|
18,889
|
Total assets
|
|
62,679
|
|
50,868
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
Payables and accrued
expenses
|
16
|
483
|
|
7,035
|
Current taxation
payable
|
|
-
|
|
16
|
|
|
|
|
|
|
|
483
|
|
7,051
|
Net assets
|
|
62,196
|
|
43,817
|
|
|
|
|
|
Equity attributable to equity holders
|
|
|
|
|
Share capital
|
17
|
632
|
|
593
|
Share premium
|
|
23,714
|
|
3,497
|
Share redemption
reserve
|
|
174
|
|
9
|
Special distributable
reserve
|
|
36,418
|
|
37,675
|
Capital reserve
|
|
3,119
|
|
3,780
|
Revenue reserve
|
|
(1,861)
|
|
(1,737)
|
Total equity
|
|
62,196
|
|
43,817
|
|
|
|
|
|
Shareholders' funds
|
|
|
|
|
|
|
|
|
|
Net asset value per A
Share
|
|
-
|
|
1.00p
|
|
|
|
|
|
Net asset value per B
Share
|
|
-
|
|
1.00p
|
|
|
|
|
|
Net asset value per Venture
Share
|
20
|
98.55p
|
|
102.17p
|
The statements were approved by
the Directors and authorised for issue on 31 May 2024 and are
signed on their behalf by:
Jane Owen
Chair
31 May 2024
The accompanying notes on pages 82
to 97 form an integral part of these statements.
Statement of Changes in
Shareholders' Equity
For the year ended 29 February 2024
|
Issued
Capital
|
Share
Premium
|
Share Redemption
Reserve
|
Special Distributable
Reserve
|
Capital
Reserve
|
Revenue
Reserve
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
Year ended 29 February 2024
|
|
|
|
|
|
|
|
Opening balance
|
593
|
3,497
|
9
|
37,675
|
3,780
|
(1,737)
|
43,817
|
Issue of Share capital
|
204
|
20,710
|
-
|
-
|
-
|
-
|
20,914
|
Cost of issue of Shares
|
-
|
(493)
|
-
|
-
|
-
|
-
|
(493)
|
Share buybacks
|
-
|
-
|
-
|
(17)
|
-
|
-
|
(17)
|
Cancellation of Shares
|
(165)
|
-
|
165
|
(165)
|
-
|
-
|
(165)
|
Dividends paid/payable
|
-
|
-
|
-
|
(1,075)
|
-
|
-
|
(1,075)
|
Transactions with
owners
|
39
|
20,217
|
165
|
(1,257)
|
-
|
-
|
19,164
|
Loss before taxation
|
-
|
-
|
-
|
-
|
(661)
|
(124)
|
(785)
|
Taxation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Loss after taxation
|
-
|
-
|
-
|
-
|
(661)
|
(124)
|
(785)
|
Other comprehensive
income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total comprehensive loss for the
period
|
-
|
-
|
-
|
-
|
(661)
|
(124)
|
(785)
|
Balance at 29 February 2024
|
632
|
23,714
|
174
|
36,418
|
3,119
|
(1,861)
|
62,196
|
The Capital Reserve consists
of:
|
|
|
|
|
|
|
|
Investment holding
gains
|
|
|
|
|
5,514
|
|
|
Other realised losses*
|
|
|
|
|
(2,395)
|
|
|
|
|
|
|
|
3,119
|
|
|
|
Issued
Capital
|
Share
Premium
|
Share Redemption
Reserve
|
Special Distributable
Reserve
|
Capital
Reserve
|
Revenue
Reserve
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
Year ended 28 February 2023
|
|
|
|
|
|
|
|
Opening balance
|
430
|
26,328
|
7
|
5,052
|
4,607
|
(1,199)
|
35,225
|
Issue of Share capital
|
165
|
18,587
|
-
|
-
|
-
|
-
|
18,752
|
Cost of issue of Shares
|
-
|
(461)
|
-
|
-
|
-
|
-
|
(461)
|
Share buybacks
|
(2)
|
-
|
2
|
(211)
|
-
|
-
|
(211)
|
Cancellation of Share
premium
|
-
|
(40,957)
|
-
|
40,957
|
-
|
-
|
-
|
Dividends paid/payable
|
-
|
-
|
-
|
(8,123)
|
-
|
-
|
(8,123)
|
Transactions with
owners
|
163
|
(22,831)
|
2
|
32,623
|
-
|
-
|
9,957
|
Loss before taxation
|
-
|
-
|
-
|
-
|
(827)
|
(538)
|
(1,365)
|
Taxation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Loss after taxation
|
-
|
-
|
-
|
-
|
(827)
|
(538)
|
(1,365)
|
Other comprehensive
income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total comprehensive loss for the
period
|
-
|
-
|
-
|
-
|
(827)
|
(538)
|
(1,365)
|
Balance at 28 February 2023
|
593
|
3,497
|
9
|
37,675
|
3,780
|
(1,737)
|
43,817
|
The Capital Reserve consists
of:
|
|
|
|
|
|
|
|
Investment holding
gains
|
|
|
|
|
4,445
|
|
|
Other realised losses
|
|
|
|
(665)
|
|
|
|
|
|
|
|
3,780
|
|
|
*Contained within total other
realised losses are the following that occurred during the year
ended 29 February 2024: £239k relating to Shenval; £374k relating
to Pixie; and £191k relating to Localz.
The capital reserve represents the
proportion of Investment Management fees charged against capital
and realised/unrealised gains or losses on the disposal/revaluation
of investments. The unrealised element of the capital reserve is
not distributable. The special distributable reserve was created on
court cancellation of the Share premium account. The revenue
reserve realised capital reserve and special distributable reserve
are distributable by way of dividend.
At 29 February 2024 the total
reserves available for distribution under the Companies Act are
£32,162,000
(2023: £35,273,000). This consists of the special distributable
reserve less the realised capital loss and less the revenue
loss.
At 29 February 2024 the total
reserves available for distribution under the VCT rules are
£2,303,000 (2023:
£3,561,000). To
maintain VCT status, amounts in the special distributable reserve
are not distributable until after the third accounting period
following the relevant allotments of Share capital. Further
information can be found in note 18.
Statement of Cash
Flows
For the year ended 29 February 2024
|
Year ended
|
|
Year ended
|
29 February
2024
|
|
28 February
2023
|
|
£'000
|
|
£'000
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
(Loss) before taxation
|
(785)
|
|
(1,365)
|
Net (gain) on investments during
the period
|
(261)
|
|
(187)
|
Adjustment for: Interest on fixed
deposits and money market funds
|
(576)
|
|
(66)
|
Cash flow used in
operations
|
(1,622)
|
|
(1,618)
|
Decrease/(increase) in
receivables
|
311
|
|
(391)
|
(Decrease) in payables
|
(292)
|
|
(488)
|
Cash flow used in operating
activities
|
(1,603)
|
|
(2,497)
|
Adjustment for non-cash items:
|
|
|
|
(Decrease)/Increase in
taxation
|
(16)
|
|
1
|
Net cash flows used in operating
activities
|
(1,619)
|
|
(2,496)
|
Cash flows from investing activities
|
|
|
|
Purchase of financial assets at
fair value through profit or loss
|
(11,884)
|
|
(11,381)
|
Disposal of financial assets at
fair value through profit or loss
|
-
|
|
9,570
|
Interest on fixed deposits and
money market funds
|
576
|
|
66
|
Net cash flows used in investing
activities
|
(11,308)
|
|
(1,745)
|
Cash flows from financing activities
|
|
|
|
Issue of Shares*
|
20,222
|
|
18,086
|
Buyback of Shares
|
(182)
|
|
(211)
|
Dividends paid
|
(7,136)
|
|
(1,659)
|
Net cash flows from financing
activities
|
12,904
|
|
16,216
|
Net (decrease)/increase in cash
and cash equivalents
|
(23)
|
|
11,975
|
Reconciliation of net cash flow to movements in cash and cash
equivalents
|
|
|
|
Cash and cash equivalents at 1
March 2023
|
18,222
|
|
6,247
|
Net (decrease)/increase in cash
and cash equivalents
|
(23)
|
|
11,975
|
Cash and cash equivalents at 29 February
2024
|
18,199
|
|
18,222
|
* Net of Share issue
costs and dividend reinvestment
|
|
|
|
The accompanying notes on pages 82
to 97 form an integral part of these statements.
Notes to the Financial
Statements
1. Corporate
Information
The Financial Statements of the
Company for the year ended 29 February 2024 were authorised for
issue in accordance with a resolution of the Directors on 31 May
2024.
The Company applied for listing on
the London Stock Exchange on 24 December 2010.
Triple Point Venture VCT plc is
incorporated and domiciled in Great Britain and registered in
England and Wales. The address of the Company's registered
office, which is also its principal place of business, is 1 King
William Street, London, EC4N 7AF.
The Company is required to
nominate a functional currency, being the currency in which the
Company predominantly operates. The functional and reporting
currency is pounds sterling (£), reflecting the primary economic
environment in which the Company operates.
The principal activity of the
Company is investment. The Company's investment strategy is to
offer exposure to venture capital investments and to maintain
liquidity in cash or cash-based funds.
2. Basis of Preparation and Accounting
Policies
Basis of Preparation
The Financial Statements of the
Company for the year to 29 February 2024 have been prepared in
accordance with UK-adopted international accounting standards and
the applicable legal requirements of the Companies Act 2006 and
comply with the Statement of Recommended Practice ("SORP"):
"Financial Statements of Investment Trust Companies and Venture
Capital Trusts" issued by the Association of Investment Companies
("AIC") in July 2022.
The Financial Statements are
prepared on a historical cost basis except that investments are
shown at fair value through profit or loss ("FVTPL"). The Company
presents its Income Statement in a tri-columnar format to give
Shareholders additional detail of the performance of the Company,
split between items of a revenue or capital nature as required by
the SORP.
From 1 January 2023, IAS 1 has
been amended to introduce the concept Material Accounting Policy
Information. The Company has performed a review of its existing
accounting policies and updated where relevant. Other new standards
coming into force during the year and future standards that come
into effect after the year-end have not had a material impact on
these financial statements. The Company has carried out an
assessment of accounting standards, amendments and interpretations
that have been issued by the International Accounting Standards
Board and that are effective for the current reporting period. The
Company has determined that the transitional effects of the
standards do not have a material impact.
Going Concern
The Company's business activities,
together with the factors likely to affect its future development,
performance and position, are set out in the Investment Manager's
Review. The Directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence
for the next five years. Accordingly, they continue to adopt the
going concern basis in preparing the financial
statements.
The Financial Risk Management
objectives and policies of the Company, including exposure to price
risk, interest rate risk, credit risk and liquidity risk are
discussed in note 19 to the financial statements.
The Company continues to meet
day-to-day liquidity needs through its cash resources on hand. The
Company's revenue comes predominantly from interest earned on its
cash and liquid resources and to a lesser extent from the
investments in Shenval (Hydroelectric power) and Modern Power
Generation ("MPG"), a small lending business. The Company takes an
active approach to manage liquidity and increase the return on cash
held.
The Company continues to raise
funds via new share issues to investors, and at the reporting date
the Company had cash of £18.2 million and net current assets of
£18.1 million (2023: £11.8 million). A further £7.6 million has
been raised since the reporting date, further strengthening the
Company's liquidity position. This cash is more than sufficient to
enable the Company to continue as a going concern for the
foreseeable future.
The major cash outflows of the
Company continue to be the payment of dividends to Shareholders,
costs relating to the funding of investments and management fees
due to the Investment Manager. Dividends and, for the most part,
new investments are discretionary and, in a time of stress the
Investment Manager may allow the Company to defer payment of
management fees.
The Directors have reviewed cash
flow projections, including various scenarios comprising a
plausible downside scenario and a severe downside scenario, whereby
the Company does not raise any future capital. In both downside
scenarios, the Company has sufficient financial resources to meet
its obligations for at least 12 months from the date of this report
being end of May 2025.
Accordingly, the Directors
continue to adopt the going concern basis in preparing the financial
statements.
Critical Accounting Judgements and
estimates
The preparation of Financial
Statements in conformity with UK-adopted international accounting
standards requires management to make judgements, estimates and
assumptions that affect the application of policies and the
reported amounts of assets and liabilities, income and
expenses.
The estimates and associated
assumptions are based on historical experience and various other
factors believed to be reasonable under the circumstances, the
results of which form the basis of making the judgements about
carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these
judgements.
The estimates and assumptions that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities relate to:
· the
valuation of unlisted financial investments held at fair value
through profit or loss, which are valued on the basis noted below
(under the heading Non-Current Asset Investments) and in note
12;
· the
recognition or otherwise of accrued income on loan notes and
similar instruments granted to investee companies, which are
assessed in conjunction with the overall valuation of unlisted
financial investments as noted above.
The key estimates made by
Directors are in the valuation of non-current assets and the
assessment of unrealised gains and losses. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects that period or in the
period of revision and future periods if the revision affects both
current and future periods.
The carrying value of investments
is disclosed in note 12. The critical accounting policies that are
declared will not necessarily result in material changes to the
financial statements in any given period but rather contain a
potential for material change.
The main accounting and valuation
policies used by the Company are disclosed in the notes below.
Whilst not all of the significant accounting policies require
subjective or complex judgements, the Company considers that the
following accounting policies should be considered
critical.
The Company has designated all
fixed asset investments as being held at fair value through profit
or loss; therefore, all gains and losses arising from investments
held are taken to the Income Statement in the period in which they
occur. Accordingly, all interest income, fee income, expenses and
investment gains and losses are attributable to assets designated
as being at fair value through profit or loss.
Investments are regularly reviewed
to ensure that the fair values are appropriately stated. Unquoted
investments are valued in accordance with current IPEV valuation
guidelines, although this does rely on subjective estimates such as
appropriate sector earnings or revenue-based multiples, forecast
results of portfolio companies, asset values of subsidiary
companies and liquidity or marketability of the investments held.
Although the Company believes that the assumptions concerning the
business environment and estimates of future cash flows are
appropriate, changes in estimates and assumptions could require
changes in the stated values.
This could lead to additional
changes in fair value in the future. The Directors do not believe
that there are any further key judgements made in applying
accounting policies or estimates in respect of the Financial
Statements.
Material Accounting Policies
These accounting policies have
been applied consistently in preparing these Financial
Statements.
New and amended standards and
interpretations
A number of amended standards
became applicable for the current reporting period. The Company did
not have to change its accounting policies or make retrospective
adjustments as a result of adopting these amended standards. The
Board do not expect that these new or amended standards will have a
material impact on the Company's financial statements.
The most significant of these
standards are set out below:
New standards and amendments - applicable 1 January
2023
(a)
IFRS 17 Insurance
Contracts
(b)
Classification of Liabilities as Current or Non-current -
Amendments to IAS 1
(c)
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS
Practice Statement 2
(d)
Definition of Accounting Estimates - Amendments to IAS 8
(e)
Deferred Tax related to Assets and Liabilities arising from a
Single Transaction - Amendments to IAS 12
(f)
Sale or contribution of assets between an investor and its
associate or joint venture - Amendments to IFRS 10 and IAS
28
FORTHCOMING
REQUIREMENTS
The following standards and
interpretations had been issued but were not mandatory for annual
reporting periods ending on or before 29 February 2024.
(a)
Amendments to IAS 1 Presentation of Financial Statements
·
Non-current liabilities with covenants
·
Deferral of Effective Date Amendment (published
15 July 2020)
·
Classification of liabilities as Current or
Non-current (Amendment to IAS1)
(b)
Lease liability in a Sale and Leaseback (Amendment to IFRS
16)
(c)
IAS 7 "Statement of Cash Flows" and IFRS 7 "Financial Instruments:
Disclosures (Amendment - Supplier Finance
Arrangements)".
Non-Current Asset Investments
The Company invests in financial
assets with a view to profiting from their total return through
capital growth. Consistent with the business model, these
investments are managed, and their performance is evaluated on a
fair value basis. Accordingly, upon initial recognition the
investments are classified by the Company as "at fair value through
profit or loss" in accordance with IFRS 9.
Non-current asset investments are
included initially at fair value, which is taken to be their cost
(excluding expenses incidental to the acquisition which are written
off in the Statement of Comprehensive Income and allocated to
"capital" at the time of acquisition). Subsequently the investments
are valued at "fair value" which is the price that would be
received to sell an asset or paid to transfer a liability (exit
price) in an orderly transaction between market participants at the
measurement date.
In the case of unquoted
investments, fair value is established by using measures of value
such as price of recent transaction, earnings or revenue-based
multiples, discounted cash flows and net assets. This is consistent
with IPEV valuation guidelines. Where price of recent transaction
is used, the valuation is calibrated to a valid methodology. The
Board believe that those investments valued based on the
transaction price adjusted for business performance and market
indicators are done so because the transaction price is still
representative of fair value.
Where securities are classified upon initial
recognition at fair value through profit or loss, gains and losses
arising from changes in fair value are included in the Statement of
Comprehensive Income for the year as capital items in accordance
with the SORP. The profit or
loss on disposal is calculated net of transaction costs of
disposal. Investments are recognised as financial
assets on legal completion of the investment contract and are
de-recognised on legal completion of the sale of an
investment.
The Company has taken the
exemption permitted by IAS 28 "Investments in Associates and Joint
Ventures" and IFRS 11 "Joint Arrangements" for entities similar to
investment entities and measures its investments in associates and
joint ventures at fair value. The Directors consider an associate
to be an entity over which the Company has significant influence,
through an ownership of between 20% and 50%. The Company's
associates and joint ventures are disclosed in note 13.
Income
Investment income includes
interest earned on bank balances, money market funds and investment
loans and includes income tax withheld at source where appropriate.
Dividend income is shown net of any related tax credit and is
brought into account on the ex-dividend date.
Fixed returns on investment loans
and debt are recognised on a time apportionment basis so as to
reflect the effective yield, provided there is no reasonable doubt
that payment will be received in due course.
Expenses
All expenses are accounted for on
the accruals basis. Expenses are charged to revenue with the
exception of the investment management fee which is charged 10% to
the revenue account and 90% to the capital account recognising the
significant increase to the Venture investments and the expected
nature of returns from them.
The transaction costs incurred
when purchasing or selling assets are written off to the Income
Statement in the period that they occur.
Taxation
Corporation tax payable is applied
to profits chargeable to corporation tax, if any, at the current
rate in accordance with IAS 12 "Income Taxes". The tax effect of
different items of income/gain and expenditure/loss is allocated
between capital and revenue on the "marginal" basis as recommended
by the SORP.
In accordance with IAS 12,
deferred tax is recognised using the balance sheet method providing
for temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts
used for taxation purposes. A deferred tax asset is recognised to
the extent that it is probable that future taxable profits will be
available against which the temporary difference can be utilised.
Deferred tax is measured at the tax rates that are expected to be
applied to the temporary differences when they reverse, based on
the laws that have been enacted or substantively enacted by the
reporting date. The Directors have considered the requirements of
IAS 12 and do not believe that any provision for deferred tax
should be made.
Financial Instruments
The Company's principal financial
assets are its investments and the accounting policies in relation
to those assets are set out above. Financial liabilities and equity
instruments are classified according to the substance of the
contractual arrangements entered.
An equity instrument is any
contract that evidences a residual interest in the assets of the
entity after deducting all of its financial liabilities. Where the
contractual terms of share capital do not have any terms meeting
the definition of a financial liability then this is classed as an
equity instrument.
Financial assets and financial
liabilities are recognised in the Company's Statement of Financial
Position when the Company becomes a party to the contractual
provisions of the instrument. At 29 February 2024 and 28 February
2023 the carrying amounts of cash and cash equivalents,
receivables, payables, accrued expenses and short-term borrowings
reflected in the financial statements are reasonable estimates of
fair value in view of the nature of these instruments or the
relatively short period of time between the original instruments
and their expected realisation.
Financial Assets
The classification of financial
assets at initial recognition depends on the purpose for which the
financial asset was acquired and its characteristics. All financial
assets are initially recognised at fair value. All purchases of
financial assets are recorded at the date on which the Company
became party to the contractual requirements of the financial
asset.
The Company's financial assets
principally comprise investments held at fair value and loans and
receivables. The Company holds trade
receivables with the objective to collect the contractual cash
flows and therefore measures them subsequently at amortised cost
using the effective interest method. The
Company's loan and equity investments are held at fair value. Gains
or losses resulting from the movement in fair value are recognised
in the Company's Statement of Comprehensive Income at each
valuation date.
Financial assets are
recognised/derecognised at the date of the purchase/disposal.
Investments are initially recognised at cost, being the fair value
of consideration given. Transaction costs are recognised in the
Consolidated Statement of Comprehensive Income as
incurred.
Fair value is defined as the amount
for which an asset could be exchanged between knowledgeable willing
parties in an arm's length transaction. Fair value is calculated on
an unlevered, discounted cash flow basis in accordance with IFRS 13
and IFRS 9.
Derecognition of financial assets
(in whole or in part) takes effect:
• when the Company has transferred
substantially all the risks and rewards of ownership; or
• when the contractual right to
receive cash flow has expired.
Financial liabilities
Financial liabilities are
classified according to the substance of the contractual agreements
entered into and are recorded on the date on which the Company
becomes party to the contractual requirements of the financial
liability.
All loans and borrowings are
initially recognised at cost, being fair value of the consideration
received, less issue costs where applicable. After initial
recognition, all interest-bearing loans and borrowings are
subsequently measured at amortised cost using the effective
interest rate method.
The Company's other financial
liabilities measured at amortised cost include trade and other
payables which are initially recognised at fair value and
subsequently measured at amortised cost using the effective
interest rate method. A financial liability (in whole or in part) is
derecognised when the Company has extinguished its contractual
obligations, it expires or is cancelled. Any gain or loss on
derecognition is taken to the Statement of Comprehensive
Income.
Issued Share Capital
The Company has now cancelled and
repaid Shareholders in respect of both the A Shares and B Shares,
and as a result the Company now only has one class of shares being
the Venture Shares.
Venture Shares are classified as
equity because they do not contain an obligation to transfer cash
or another financial asset and each share has full voting, dividend
and capital distribution rights.
Issue costs associated with the
allotment of Shares have been deducted from the Share premium
account in accordance with IAS 32. The Company had no external debt
at the reporting date; consequently, all capital is represented by
the value of Share capital, distributable and other reserves. Total
Shareholder equity at 29 February 2024 was £62.2 million (2023:
£43.8 million).
Cash and Cash Equivalents
Cash and cash equivalents
representing cash available at less than three months' notice are
classified as Financial Assets at amortised cost under IFRS
9.
Cash and cash equivalents
comprises cash at bank and other highly liquid short-term
investments redeemable or with a maturity of three months or less
at the date of acquisition and subject to insignificant changes in
fair value. For the purpose of the Cash Flow Statement, cash and
cash equivalents comprises, cash at bank and money market funds.
The carrying amount approximates fair value.
Reserves
The revenue reserve (retained
earnings) and capital reserve reflect the guidance in the SORP. The
capital reserve represents the proportion of Investment Management
fees charged against capital and any realised/unrealised gains or
losses on the disposal/revaluation of investments.
The special distributable reserve
was created on court cancellations of the Share premium account,
most recently and during the financial year on 16 August 2022 in
respect of the Venture Share Class.
The revenue reserve, the portion
of the capital reserve representing realised capital profits and
losses less unrealised gains and the special distributable reserve
are distributable by way of dividend. More information on the
Company's available reserves is in note 18.
Foreign currencies
Transactions in foreign currencies
are translated at the foreign exchange rate ruling at the date of
the transaction.
Monetary assets and liabilities
denominated in foreign currencies at the reporting date are
translated at the foreign exchange rate ruling at that date.
Foreign exchange differences arising on translation are recognised
in the Statement of Comprehensive Income under Revenue or Capital
column wherever appropriate.
Dividends
Dividends payable are recognised
as distributions in the financial statements when the Company's
obligation to make payment has been established. Typically this is
not until payment is made as the Company usually declares interim
dividends opposed to final dividends.
3. Segmental Reporting
The Directors are of the opinion
that the Company only has a single operating segment of business,
being investment activity.
4. Significant risk changes in the current reporting
period
The Company has reviewed its
exposure to climate related and other emerging business risks, but
has not identified any new significant risks that could impact the
financial performance or position of the Company as at 29 February
2024.
For a detailed discussion about
the Company's performance please refer to the Chair's statement on
pages 4 to 11. The financial position of the Company can be found
on page 78.
All revenues and assets are
generated and held in the UK.
5.
Investment
Income
|
Year Ended 29 February
2024
|
|
Year Ended 28 February
2023
|
|
|
|
|
Total
|
|
|
|
|
Total
|
|
|
|
|
£'000
|
|
|
|
|
£'000
|
Interest receivable on bank
balances
|
|
|
|
183
|
|
|
|
|
34
|
Liquidity Fund Holdings
interest
|
|
|
|
403
|
|
|
|
|
-
|
Loan interest
|
|
|
|
96
|
|
|
|
|
179
|
|
|
|
|
682
|
|
|
|
|
213
|
6.
Investment
Management Fees
|
Year ended 29 February
2024
|
|
Year ended 28 February
2023
|
|
|
|
|
|
Total
|
|
|
|
|
|
Total
|
|
|
|
|
|
£'000
|
|
|
|
|
|
£'000
|
Investment Management
Fees
|
|
|
|
|
1,024
|
|
|
|
|
|
1,127
|
TPIM provides investment
management services to the Company under an Investment Management
Agreement dated 12 September 2023. From 12 September 2023, the
Investment Manager was appointed AIFM and is now responsible for
risk management and portfolio management.
The Investment Manager has full
discretion under the Investment Management Agreement to make
investments in accordance with the Company's Investment Policy from
time to time. The agreement provides for an investment management
fee of 2.00% per annum of net assets, payable quarterly in arrears.
The appointment shall continue for a period of at least six years
from the date of first admission of Venture Shares which was on 12
April 2019.
Performance fee
Triple Point earns a performance
fee if the total return (net asset value plus distributions made)
to holders of the Venture Shares exceeds their net initial
subscription price by an annual threshold of 3% per annum,
calculated on a compound basis. To the extent that the total return
exceeds the threshold over the relevant period then a performance
incentive fee of 20% of the excess is payable to Triple Point.
Performance fees are assessed based on the VCT's audited year-end
valuations (i.e. in February each year) and will be accrued in the
accounts of the Company. High water marks apply. No performance
fees have been earned by Triple Point in the current or prior
year.
Fees paid to the Investment
Manager for administrative and other services during the year were
£142,000 (2023: £100,000).
The Investment Manager did not
receive fees for services to investee companies in the current or
prior year.
7. Operating Expenses
All expenses are accounted for on
an accruals basis.
Expenses are charged wholly to
revenue, apart from management fees which are charged 90% to
capital and 10% to revenue; any performance fees incurred are
charged wholly to capital. Transaction costs incurred when selling
assets are written off to the Income Statement in the period that
they occur.
Operating expenses
|
Year ended
|
|
Year ended
|
|
29 February
2024
|
|
28 February
2023
|
|
|
|
|
|
|
|
Total
|
|
|
|
Total
|
|
|
|
£'000
|
|
|
|
£'000
|
|
|
|
|
|
|
|
|
Financial and regulation
costs
|
|
|
133
|
|
|
|
136
|
General administration
|
|
|
56
|
|
|
|
23
|
Fees payable to the Company's
auditor for audit services
|
|
|
75
|
|
|
|
65
|
Fees payable to the Company's
auditor for audit-related assurance services
|
|
|
-
|
|
|
|
13
|
Company secretarial
services
|
|
|
24
|
|
|
|
22
|
Other professional fees
|
|
|
344
|
|
|
|
305
|
Directors' fees
|
|
|
71
|
|
|
|
70
|
Interest write-off
|
|
|
-
|
|
|
|
4
|
Interest payable
|
|
|
1
|
|
|
|
-
|
|
|
|
704
|
|
|
|
638
|
VAT has been removed from the
current year Audit fees and allocated to General Administration
expenses.
8. Auditor Remuneration
Fees paid to the Company's
auditor, BDO LLP, are as follows:
|
Year ended 29 February
2024
|
|
Year ended 28 February
2023
|
|
|
|
|
|
Total
|
|
|
|
|
|
Total
|
|
|
|
|
|
£'000
|
|
|
|
|
|
£'000
|
Fees payable to the Company's
auditor:
|
|
|
|
|
|
|
|
|
|
for the audit of the Financial
Statements
|
|
|
|
|
75
|
|
|
|
|
|
65
|
for other services
|
|
|
|
|
-
|
|
|
|
|
|
13
|
|
|
|
|
|
75
|
|
|
|
|
|
78
|
BDO LLP were not appointed to
provide any non-audit services to the Company during the
year.
For the year ended 29 February
2024, fees (excluding VAT) payable to the Company's auditor for
audit services were £74,890 (2023: £65,856). Fees payable to the
Company's auditor for audit-related assurance services during the
year were nil (2023: £12,500).
9. Directors' Remuneration
|
Year ended 29 February
2024
|
|
Year ended 28 February
2023
|
|
Total
|
|
Total
|
|
£'000
|
|
£'000
|
Jane Owen
|
25
|
|
24
|
Chad Murrin*
|
8
|
|
19
|
Tim Clarke**
|
-
|
|
7
|
Julian Bartlett
|
22
|
|
20
|
Jamie Brooke***
|
15
|
|
-
|
Sam Smith****
|
1
|
|
-
|
|
71
|
|
70
|
*Resigned as a Director effective
19 July 2023
**Resigned as a Director effective
14 July 2022
***Appointed as a Director
effective 8 June 2023
****Appointed as a Director
effective 8 February 2024
The only remuneration received by
the Directors was their Directors' fees. The Company has no
employees other than the Non-Executive Directors. The average
number of Non-Executive Directors in the year was three. Full
disclosure of Directors' remuneration is included in the Directors'
Remuneration report.
10.
Taxation
|
Audited
Year ended 29 February
2024
|
Audited
Year ended 28 February
2023
|
|
Total
|
Total
|
|
£'000
|
£'000
|
Loss on ordinary activities before
tax
|
(785)
|
(1,365)
|
Corporation tax @ 25% (28 Feb 2023
- 19%)
Effect of:
|
(196)
|
(259)
|
Capital gains not
taxable
|
(65)
|
(35)
|
Disallowed expenditure
|
21
|
10
|
Unrelieved tax losses arising in
the period
|
-
|
(3)
|
Excess management expenses on
which deferred tax not recognised
|
240
|
287
|
Tax charge/(credit) for the
period
|
-
|
-
|
Capital gains and losses are
exempt from corporation tax due to the Company's status as a
Venture Capital Trust.
Investment companies which have
been approved by HM Revenue & Customs under section 1158 of the
Corporation Tax Act 2010 are exempt from tax on capital gains. The
Directors are of the opinion that the Company has complied with the
requirements for maintaining investment trust status for the
purposes of section 1158 of the Corporation Tax Act
2010.
The Company has not provided for
deferred tax on any capital gains or losses arising on the
revaluation of investments.
Deferred tax asset of £1.1 million
(2023: £0.9 million) has not been recognised as it is unlikely that
the Company will generate sufficient taxable profits in the future
to utilise these expenses.
11.
Earnings per
Share
The loss per Venture Share is
1.46p (2023: loss of 8.47p) and is based on a loss from ordinary
activities after tax of £0.8 million (2023: £3.3 million loss) and
on the weighted average number of Venture Shares in issue during
the period of 53,729,274 (2023: 38,672,163).
There is no difference between
basic or diluted Earnings per Share as there are no convertible
securities.
12.
Financial Assets at Fair Value
through Profit or Loss
Investments
Fair Value Hierarchy:
IFRS 13 requires disclosure of
fair value measurement by level. The level of fair value hierarchy
within the financial assets or financial liabilities is determined on
the basis of the lowest level input that is significant to the fair
value measurement.
Financial assets and financial
liabilities are classified in their entirety into only one of the
following three levels:
Level 1: quoted prices on
active markets for identical assets or liabilities. The fair value
of financial instruments traded on active markets is based on
quoted market prices at the date of the Statement of Financial
Position. A market is regarded as active where the market in which
transactions for the asset or liability takes place with sufficient
frequency and volume to provide pricing information on an ongoing
basis. The quoted market price used for financial assets held by
the Company is the current bid price.
Level 2: the fair value of
financial instruments that are not traded on active markets is
determined by using valuation techniques. These valuation
techniques maximise the use of observable inputs including market
data where it is available either directly or indirectly and rely
as little as possible on entity specific estimates. If all
significant inputs required to fair value an instrument are
observable, the instrument is included in Level 2.
Level 3: the fair value of
financial instruments that are not traded on an active market (for
example, investments in unquoted companies) is determined by using
valuation techniques such as discounted cash flows. If one or more
of the significant inputs is based on unobservable inputs including
market data, the instrument is included in Level 3.
There have been no transfers
between these classifications in the period. Any change in fair
value is recognised through the Statement of Comprehensive
Income.
All items held at fair value
through profit or loss were designated as such upon initial
recognition. Movements in investments at fair value through profit
or loss during the year to 29 February 2024 are summarised below.
The most critical estimates, assumptions and judgements relate to
the determination of the carrying value of investments at "fair
value through profit and loss" (FVTPL).
All investments held by the
Company are classified as FVTPL and measured in accordance with the
International Private Equity and Venture Capital (IPEV) valuation
guidelines, as updated in December 2022. For investments actively
traded on organised financial markets, fair value is generally
determined by reference to Stock Exchange market quoted bid prices
at the close of business on the date of the Statement of Financial
Position, the Company does not have any quoted investments at the
reporting date.
Unquoted investments are stated at
fair value by the Directors at each measurement date in accordance
with appropriate valuation techniques, which are consistent with
the IPEV valuation guidelines:
i. the price of a
recent investment, if resulting from an orderly transaction, is
assumed to represent fair value as of the transaction date. At
every subsequent measurement date, the recent investment price may
remain an appropriate indicator of fair value, however as its
validity is eroded over time, adequate consideration will be given
to the current facts and circumstances, including, but not limited
to, changes in the market or changes in the performance of the
portfolio company. We may solely rely on the most recent price for
certain investments where other valuation methodologies may not be
possible, notably where there are no current or short-term future
revenues expected;
ii. where a recent
transaction is not deemed to be representative of fair value, a
market approach may be considered. This technique involves the
application of an appropriate multiple to a performance measure
(typically revenue, but potentially also EBITDA) in order to derive
the value of the business. Appropriate multiples are usually
derived by reference to a current market-based multiple, as
reflected in market valuations of comparable quoted companies or
the price at which comparable companies have changed ownership, to
the extent this information is publicly available. It must be
acknowledged that as we invest in companies looking to disrupt
their respective sectors or enter new technologies, direct
comparators often do not exist. In the absence of relevant
comparable calibration to the recent investment price validates
that the valuation techniques using contemporaneous market inputs
generate fair value at the investment date and that the same
valuation techniques using updated market inputs as of each
subsequent reporting date will generate fair value at each such
date. This approach will notably help capture any risks associated
with a lack of liquidity in the minority holding of an unquoted
investment and may be further adjusted to reflect the trading
performance of the portfolio company versus expectations as at the
investment;
iii. for investments in
early or development stages, where there are no current or
short-term future revenues expected, the most appropriate valuation
approach to measure fair value may be based on calibrating the
latest pricing round using qualitative milestones. These milestones
provide a directional indication of the movement in fair
value;
iv. where a number of discreet
outcomes can be expected for an investment, a simplified
probability-weighted expected return model may be used to determine
fair value; and
v. where appropriate, an
income approach may be used.
Capital gains and losses on
investments, whether realised or unrealised, are dealt with in the
revenue and revaluation reserves and movements in the period are
shown in the Income Statement. All figures are shown net of any
applicable transaction costs incurred.
All investments are initially
recognised at transaction price and subsequently measured at fair
value. Changes in fair value are recognised in the Income
Statement. A key judgement made in applying the above accounting
policy relates to investments that are permanently written off.
Where the value of an investment has fallen permanently below the
price of investment, the loss is treated as a realised loss, even
if the investment is still held.
The Board assesses the portfolio
for such investments and, after agreement with the Investment
Manager, will agree the values that represent the extent to which
an investment loss has become realised. This is based upon an
assessment of objective evidence of that investment's future
prospects, to determine whether there is potential for the
investment to recover in value.
Movements in Level 3 investments
held at fair value through the profit or loss during the year to 29
February 2024 were as follows:
|
|
Venture
Shares
|
|
|
Cost
|
Gains
|
|
Fair Value
|
|
|
£'000
|
£'000
|
|
£'000
|
Year ended 29 February 2024:
|
|
|
|
|
|
Opening cost
|
|
27,762
|
|
|
27,762
|
Opening investment holding
gains
|
|
|
4,217
|
|
4,217
|
Opening value at 1 March 2023*
|
|
27,762
|
4,217
|
|
31,979
|
Purchases at cost
|
|
11,884
|
|
|
11,884
|
Disposal**
|
|
(750)
|
|
|
(750)
|
Loss on disposal recognised in
prior year
|
|
|
450
|
|
450
|
Net investment gains in current
year
|
|
|
261
|
|
261
|
Closing value at 29 February 2024
|
|
38,896
|
4,928
|
|
43,824
|
|
|
A Shares
|
|
B Shares
|
|
Venture
Shares
|
Total
|
|
|
£'000
|
|
£'000
|
|
£'000
|
£'000
|
Year ended 28 February 2023:
|
|
|
|
|
|
|
|
Opening Cost
|
|
860
|
|
6,105
|
|
17,785
|
24,750
|
Opening investment holding
gains/(losses)
|
|
(94)
|
|
(2,040)
|
|
7,366
|
5,232
|
Opening fair value at 1 March 2022
|
|
766
|
|
4,065
|
|
25,151
|
29,982
|
Purchases at cost
|
|
-
|
|
-
|
|
11,381
|
11,381
|
Disposal proceeds
|
|
(233)
|
|
(6,656)
|
|
(2,681)
|
(9,570)
|
Adjustments between Share
Classes
|
|
(246)
|
|
-
|
|
245
|
(1)
|
Realised (loss)/gain on
disposal
|
|
(130)
|
|
551
|
|
592
|
1,013
|
Investment holding
(losses)/gains
|
|
(157)
|
|
2,040
|
|
(2,709)
|
(826)
|
Closing fair value at 28 February 2023
|
|
-
|
|
-
|
|
31,979
|
31,979
|
Closing cost
|
|
-
|
|
-
|
|
27,512
|
27,512
|
Closing investment holding
gains
|
|
-
|
|
-
|
|
4,467
|
4,467
|
* The split between opening cost
and investment holding gains as at 1 March 2023 has been
reallocated. The net effect of this adjustment on the opening fair
value is nil.
** During the year ended 29
February 2024, the investment in Localz was disposed of for
expected proceeds of £456k which have been valued at £300k to take
into consideration uncertainties in future cash flows. Thus, a
total loss of £450k when compared to the original investment cost
of £750k has been recorded. As at the prior year ended 28 February
2023, £259k was classified as a realised loss with the balance of
£191k being recognised as an unrealised loss. As at the year ended
29 February 2024, the remaining £191k has been reclassified as a
realised loss under the Statement of Changes in Shareholders
Equity.
Given the nature of the Company's
venture capital investments, the changes in fair values of such
investments recognised in these Financial Statements are not
considered to be readily convertible to cash in full at the
Statement of Financial Position date
and accordingly any gains or losses on these items are treated as
unrealised.
Unquoted investments in the
portfolio are considered Level 3 assets, such that their values are
not directly observable but are estimated using a combination of
valuation methodologies which notably extrapolate from observable
market data for comparable assets. The sensitivity of these
valuations to a reasonable possible change in such assumptions is
given in note 19.
Further details of the types of
investments are provided in the Investment Manager's review and
investment portfolio on pages 29 to 32 and 34 to 40 and details of
entities over which the VCT has significant influence are
included in note 13.
13.
Unconsolidated associates and
joint ventures
The principal undertakings in
which the Company's interest at the year-end is 20% or more are as
follows:
Name
|
Registered
address
|
Holding
|
Green Highland Shenval
Limited
|
Q Court, 3 Quality Street,
Edinburgh, EH4 5BP
|
22.09%
|
· The
investment is a combination of debt and equity.
· Equity holding is equal to the voting rights.
· The
investment is held in the UK.
14. Receivables
|
29 February
2024
|
|
28 February
2023
|
|
|
|
|
|
Total
|
|
|
|
|
|
Total
|
|
|
|
|
|
£'000
|
|
|
|
|
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued income
|
|
|
|
|
23
|
|
|
|
|
|
-
|
Prepaid expenses
|
|
|
|
|
42
|
|
|
|
|
|
26
|
Other debtors*
|
|
|
|
|
291
|
|
|
|
|
|
641
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
356
|
|
|
|
|
|
667
|
*Other debtors relate to interest
receivable on investment loans.
15.
Cash and Cash
Equivalents
|
29 February
2024
|
|
28 February
2023
|
|
|
|
|
|
Total
|
|
|
|
|
|
Total
|
|
|
|
|
|
£'000
|
|
|
|
|
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at bank
|
|
|
|
|
18
|
|
|
|
|
|
18,222
|
Money Market funds
|
|
|
|
|
18,181
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,199
|
|
|
|
|
|
18,222
|
Cash and cash equivalents are
short-term, highly liquid investments that are readily convertible
to known amounts of cash and that are subject to a lower risk of
changes in value. Therefore, an investment normally qualifies as a
cash equivalent only when it has a short maturity of, say, three
months or less from the date of acquisition.
This comprises investment grade
bonds and investments in money market funds.
16.
Payables and Accrued
Expenses
|
29 February
2024
|
|
28 February
2023
|
|
|
|
|
|
Total
|
|
|
|
|
|
Total
|
|
|
|
|
|
£'000
|
|
|
|
|
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade Creditors
|
|
|
|
|
88
|
|
|
|
|
|
50
|
Other taxation and social
security
|
|
|
|
|
6
|
|
|
|
|
|
-
|
Accrued expenses & deferred
income
|
|
|
|
|
389
|
|
|
|
|
|
6,985
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
483
|
|
|
|
|
|
7,035
|
17.
Share
Capital
Ordinary shares of
£0.01.
|
|
|
|
|
|
Year ended 29 February 2024
|
|
|
|
|
|
As at 1 March 2023
|
No of Venture
Shares
|
No of A
Shares
|
No of B
Shares
|
Total
Shares
|
Amount £'000
|
|
42,720,246
|
9,777,285
|
6,758,795
|
59,256,326
|
593
|
Allotted during the period
|
|
|
|
|
|
20 March
2023
|
5,831,295
|
-
|
-
|
5,831,295
|
58
|
4 April
2023
|
2,093,574
|
-
|
-
|
2,093,574
|
21
|
5 April
2023
|
464,579
|
-
|
-
|
464,579
|
5
|
24 April
2023
|
161,021
|
-
|
-
|
161,021
|
2
|
6 July
2023
|
1,138,499
|
-
|
-
|
1,138,499
|
11
|
28 July
2023
|
1,347,801
|
-
|
-
|
1,347,801
|
13
|
4
September 2023 (DRIS)
|
210,732
|
-
|
-
|
210,732
|
2
|
27
October 2023
|
1,124,122
|
-
|
-
|
1,124,122
|
11
|
30
November 2023
|
2,118,892
|
-
|
-
|
2,118,892
|
21
|
21
December 2023
|
1,673,802
|
-
|
-
|
1,673,802
|
17
|
13
February 2024
|
4,247,195
|
-
|
-
|
4,247,195
|
42
|
|
|
|
|
|
|
Shares bought back and cancelled
|
|
|
|
|
|
10 March
2023
|
-
|
(9,777,285)
|
-
|
(9,777,285)
|
(97)
|
10 March
2023
|
-
|
-
|
(6,758,795)
|
(6,758,795)
|
(68)
|
4 August
2023
|
(6,958)
|
-
|
-
|
(6,958)
|
-
|
3
November 2023
|
(10,306)
|
-
|
-
|
(10,306)
|
-
|
12
December 2023
|
(874)
|
-
|
-
|
(874)
|
-
|
|
|
|
|
|
|
Ordinary Share Capital 29
February
2024
|
63,113,620
|
-
|
-
|
63,113,620
|
631
|
Year ended 28 February 2023
As at 1 March
2022
|
No of Venture
Shares
|
No of A
Shares
|
No of B
Shares
|
Total
Shares
|
Amount
£'000
|
|
26,445,431
|
9,777,285
|
6,758,795
|
42,981,511
|
430
|
|
|
|
|
|
|
Allotted during the period
|
|
|
|
|
|
1 March
2022
|
3,034,337
|
-
|
-
|
3,034,337
|
30
|
15 March
2022
|
1,172,794
|
-
|
-
|
1,172,794
|
12
|
1 April
2022
|
4,067,490
|
-
|
-
|
4,067,490
|
41
|
5 April
2022
|
1,698,756
|
-
|
-
|
1,698,756
|
17
|
8 July
2022
|
1,755,825
|
-
|
-
|
1,755,825
|
18
|
27 July
2022
|
698,271
|
-
|
-
|
698,271
|
7
|
29 July
2022
|
692,265
|
-
|
-
|
692,265
|
7
|
5
September 2022
|
196,331
|
-
|
-
|
196,331
|
2
|
4
November 2022
|
1,308,744
|
-
|
-
|
1,308,744
|
13
|
13
December 2022
|
1,859,708
|
-
|
-
|
1,859,708
|
19
|
|
|
|
|
|
|
Shares bought back and cancelled
|
|
|
|
|
|
18
August 2022
|
(17,665)
|
-
|
-
|
(17,665)
|
(1)
|
18
November 2022
|
(192,041)
|
-
|
-
|
(192,041)
|
(2)
|
|
|
|
|
|
|
Ordinary Share Capital 28 February 2023
|
42,720,246
|
9,777,285
|
6,758,795
|
59,256,326
|
593
|
At the reporting the date, the
Company had one class of share, being the Venture Shares which have
full voting, dividend and capital distribution rights.
During the year 20,200,780 new
Venture Shares were issued at an average price per share of £1.03.
The gross consideration received was £20.74 million (net
£20.22 million).
An additional 210,732 Venture Shares were issued in the year by way
of a Dividend Reinvestment Scheme at an average price of £0.95. In
the year Triple Point Venture VCT plc repurchased 18,138 Venture
Shares at an average price per share of £0.94.
18.
Dividends
|
Year ended 29 February
2024
|
Year ended 28 February
2023
|
|
£'000
|
£'000
|
|
|
|
Venture Share Dividend
2.00p per share
(2023: 3.00p)
|
1,075
|
1,187
|
A Share Dividend 9.42p per
share
|
-
|
921
|
B Share Dividend 10.00p per
share
|
-
|
676
|
B Share Dividend 79.00p per
share
|
-
|
5,339
|
|
|
|
Total Dividend Paid
|
1,075
|
8,123
|
The Board announced an interim
dividend of 2p per share, equivalent to £1,043,319 to Shareholders on 3
January 2024. The interim dividend was paid on 18 March 2024 to Shareholders on the
register at the close of business on 29 February 2024 and as a result is
not included in the table above.
At the reporting date, the Company
had distributable reserves of £2,302,793. Following the year end, a
further £8 million of previously converted share premium came
available for distribution under the VCT rules.
19.
Financial Instruments and
Risk Management
The Company's financial
instruments comprise equity and fixed-interest investments, cash
balances and liquid resources including debtors and creditors. The
Company holds financial assets in accordance with its investment
policy of investing mainly in a portfolio of VCT qualifying
unquoted securities whilst holding a proportion of its assets in
cash or near-cash investments in order to provide a reserve of
liquidity.
The Investment Manager reports to
the Board on a quarterly basis and provides information to the
Board which allows it to monitor and manage financial risks relating
to its operations. The Company's activities expose it to a variety
of financial risks including market risk (comprising price risk,
interest rate risk and foreign currency risk), credit risk and
liquidity risk. Fixed Asset Investments (see note 12) are valued at
fair value. Unquoted investments are carried at fair value as
determined by the Directors in accordance with current venture
capital industry guidelines. The fair value of all other financial
assets and liabilities is approximated by their carrying value on
the Statement of Financial Position.
Classification of Financial Instruments
The following table discloses the
financial assets and liabilities of the Company in the categories
defined by IFRS 9, "Financial Instruments".
|
Total
value
|
Financial Assets at
amortised cost
|
Financial Liabilities at
amortised cost
|
Fair value through profit or
loss
|
|
£'000
|
£'000
|
£'000
|
£'000
|
Year ended 29 February 2024
|
|
|
|
|
Assets:
|
|
|
|
|
Financial assets at fair value
through profit or loss
|
43,824
|
-
|
-
|
43,824
|
Receivables
|
356
|
356
|
-
|
-
|
Cash and cash
equivalents
|
18,199
|
18,199
|
-
|
-
|
|
62,379
|
18,555
|
-
|
43,824
|
Liabilities:
|
|
|
|
|
Other Payables
|
483
|
-
|
483
|
-
|
|
483
|
-
|
483
|
-
|
|
|
|
|
|
Year ended 28 February 2023
|
|
|
|
|
Assets:
|
|
|
|
|
Financial assets at fair value
through profit or loss
|
31,979
|
-
|
-
|
31,979
|
Receivables
|
667
|
667
|
-
|
-
|
Cash and cash
equivalents
|
18,222
|
18,222
|
-
|
-
|
|
50,868
|
18,889
|
-
|
31,979
|
Liabilities:
|
|
|
|
|
Other Payables
|
7,035
|
-
|
7,035
|
-
|
|
7,035
|
-
|
7,035
|
-
|
Fixed and current asset
investments (see note 12) are valued at fair value. Unquoted
investments are carried at fair value as determined by the
Directors in accordance with IPEV guidelines as detailed within the
Investment Manager's Review and note 12. The fair value of all
other financial assets and liabilities are represented by their
carrying value in the Statement of Financial Position. The
Directors believe that the fair value of the assets held at the
year-end is equal to their carrying value. The Company's creditors
and debtors are initially recognised at fair value, which is
usually transaction cost and subsequently measured at amortised
cost using the effective interest method.
In carrying on its investment
activities, the Company is exposed to various types of risk
associated with the financial instruments and markets in which it
invests. The most significant types of financial risk facing the
Company are market risk, interest rate risk, credit risk and
liquidity risk. The Company's approach to managing these risks is
set out below together with a description of the nature and amount
of the financial instruments held at the date of the Statement of
Financial Position.
Market Risk
The Company's strategy for
managing investment risk is determined with regard to the Company's
investment policy, as outlined on page 14. The management of market
risk is part of the investment management process and is a central
feature of venture capital investment. The Company's portfolio is
managed in accordance with the policies and procedures described in
the Directors' Report on pages 62 to 65, having regard to the
possible effects of adverse price movements, with the objective of
maximising overall returns to shareholders.
Investments in smaller companies,
by their nature, usually involve a higher degree of risk than
investments in larger companies quoted on a recognised stock
exchange, though the risk can be mitigated to a certain extent by
diversifying the portfolio across business sectors and asset
classes. The overall disposition of the Company's assets is
regularly monitored by the Board.
Details of the Company's
investment portfolio at the Statement of Financial Position date
are set out on page 78.
70.5% (2023: 73.0%) by value of
the Company's net assets comprises investments in unquoted
companies held at fair value. In the context of continued market
uncertainties caused by macroeconomic factors, we have used a
sensitivity analysis of 20%.
A 20% overall decrease in the
valuation of the unquoted investments at 29 February 2024 would
have decreased net assets and the total profit for the year by £8.8
million (2023: £6.4 million). An equivalent change in the opposite
direction would have increased net assets and the total profit for
the year by the same amount.
10.0% of net assets (14.1% of
portfolio value) is exposed to changes in the foreign exchange
rate. An increase in the foreign exchange rate of 5% would decrease
the net asset value by 0.5% (£0.3 million). A decrease in the
foreign exchange rate of 5% would have the opposite effect,
increasing the net asset value by 0.5% (£0.3 million). The 5%
sensitivity used provides the most meaningful impact of average
foreign exchange rate changes across the portfolio.
20.0% of the VCT's net assets
(28.4% of portfolio value) are valued after assessing the
developments of the investee company against performance milestone
(e.g. cash or revenue targets) including PRI calibration. An
increase in the average multiple used by 15% would increase the net
asset value by 3.0%. A decrease in the average multiple used by 15%
would decrease the net asset value by 3.0%. The 15% sensitivity
used provides the most meaningful impact of average multiple
changes across the portfolio.
50.3% of net assets (71.6% of
portfolio value) is valued using Price of Recent Investment (PRI),
and an increase in the average PRI used by 15% would increase the
net asset value by 7.5%. A decrease in the average PRI used by 15%
would decrease the asset value by 7.5%. However, the impact on the
portfolio value might be less given that most investments have some
downside protection in the form of liquidation preference. The 15%
sensitivity used provides the most meaningful impact of average PRI
changes across the portfolio.
Interest Rate Risk
Some of the Company's financial
assets are interest bearing, of which some are at fixed rates and
some at variable rates. As a result, the Company is exposed to
interest rate risk arising from fluctuations in the prevailing
levels of market interest rates.
Fixed Rate
The table below summarised the
weighted average effective interest rates for its fixed
interest-bearing financial instruments:
The Company has two fixed interest
investment loans, one in relation to its investment in Modern Power
Generation and the other in relation to its investment in Green
Highland Shenval. The weighted average interest rate applicable to
these loans is 19.2% (2023:19.2%).
Floating Rate
The Company's floating rate
investments as at 29 February 2024 comprised interest-bearing money
market funds. The Company's cash held at bank earns no interest due
to the HMRC VCT rule which prohibits a VCT from earning more than
30% of its income in non-VCT qualifying income, and interest earned
on bank balances is non-qualifying income.
The benchmark rate which
determines the rate of interest receivable on its money market
investment is the Bank of England base rate, which was 5.25% at 29
February. The amounts held in floating rate investments at the
Statement of Financial Position date were as
follows:
|
29 February
2024
|
|
28 February
2023
|
|
£'000
|
|
£'000
|
Cash on Deposit
|
19
|
|
18,222
|
Money Market funds
|
18,180
|
|
-
|
|
18,199
|
|
18,222
|
A 1% change in the base rate would
increase/decrease income receivable from these investments and the
net assets for the year by £182,000 (2023: £182,000).
Foreign Currency Risk
Foreign currency risk is defined as
the risk that the fair values of future cash flows will fluctuate
because of changes in foreign exchange rates. With the exception of Adfenix AB, whose investment is denominated in
Swedish Kroner ("SEK"), and
Digital Therapeutics Inc (trading
as Quit Genius),
Airly Inc, and Degreed
Inc, which are
denominated in US dollars ("USD"),
and Knok LDA, whose investments are denominated in Euros,
the Company's
financial assets and liabilities
are in GBP. Substantially
all of its revenues and expenses are
also denominated in GBP, except for the
aforementioned exceptions.
The Company's investments
denominated in foreign currency comprise 14.1% of the Company's
Investment Portfolio, not including cash. As a result, the Company
does not consider the investments in Adfenix AB, Digital Therapeutics Inc (t/a Quit
Genius), Airly Inc, Degreed Inc, Knok LDA and Nory to
materially expose the Company to foreign currency risk.
Credit Risk
Credit risk is the risk that a
counterparty will fail to discharge an obligation or commitment
that it has entered into with the Company. The Investment Manager
and the Board carry out a regular review of counterparty risk. The
carrying value of the financial assets represent the maximum credit
risk exposure at the Statement of
Financial Position date.
|
29 February
2024
|
|
28 February
2023
|
|
£'000
|
|
£'000
|
Non-Qualifying investment
loans
|
172
|
|
172
|
Qualifying investment
loans
|
1,076
|
|
883
|
Cash on Deposit
|
19
|
|
18,222
|
Money Market funds
|
18,180
|
|
-
|
Receivables
|
356
|
|
667
|
|
19,803
|
|
19,944
|
The Company's bank accounts are
maintained with The Royal Bank of Scotland plc ("RBS") and Cater
Allen Private Bank. Should the credit quality or financial position
of RBS or Cater Allen deteriorate significantly, the Investment
Manager will move the cash holdings to another
bank.
Credit risk relating to listed
money market funds is mitigated by investing in a portfolio of
investment instruments of high credit quality, comprising
securities issued by major UK companies and institutions. Credit
risk relating to loans to and preference shares in unquoted
companies is considered to be part of market risk.
Liquidity Risk
Liquidity risk is the risk that
the Company may not be able to meet its financial obligations as
they fall due. Prudent liquidity risk management implies
maintaining sufficient cash and marketable securities and the
availability of funding through an adequate amount of committed
credit facilities to meet obligations when due and to close out
market positions.
The Investment Manager and the
Board continuously monitor forecast and actual cash flows from
operating, financing, and investing activities to consider payment
of dividends, repayment of trade and other payables or funding
further investing activities. The Company ensures it maintains
adequate reserves and will put in place banking facilities and it
will continuously monitor forecast and actual cash flows to seek to
match the maturity profiles of financial assets and liabilities.
Further analysis on the Company's liquidity is included within the
Going Concern assessment.
The Company's listed money market
funds are considered to be readily realisable as they are of high
credit quality as outlined above. Liquidity risk is managed on a
continuing basis by the Investment Manager in accordance with
policies and procedures laid down by the Board. The Company's
overall liquidity risks are monitored on a quarterly basis by the
Board. The Company maintains sufficient investments in cash and
readily realisable securities to pay accounts payable and accrued
expenses. At 29 February 2024, these investments were valued at
£18.2 million (2023: £nil).
20. Net Asset Value
per Share
|
Year ended 29 February
2024
|
Year ended 28 February
2023
|
Net asset value per share (p)
Venture Shares
|
98.55
|
102.17
|
The net asset value per Share for
the Venture Shares is 98.55p
(2023: 102.17p) and is calculated based on net
assets of £62.196
million (2023: £43.817 million) divided by the 63,113,620 Venture
Shares in issue.
21. Relationship with Investment
Manager
During the period, TPIM received
£1.2 million (2023: £1.2 million) (which has been expensed by the
Company) for providing management and administrative services to
the Company, of which £0.3 million remained outstanding at the year
end.
The Investment Manager charged
£24,000 (2023: £18,000) for the provision of Company Secretarial
services.
In addition, TPIM received
£352,245 (2023: £335,880) of arrangement fees on Venture Share
allotments during the year.
22. Ultimate controlling
party
In the opinion of the Board, on
the basis of the shareholdings advised to them, the Company has no
ultimate controlling party.
23. Related Party
Transactions
The Directors Remuneration Report
on page 57 to 61 discloses the Directors' remuneration and
shareholdings and transactions with the
Investment Manager are disclosed in note 21.
24. Commitments and
Contingencies
There were no commitments or
contingencies in place at the end of the financial year.
25. Post Balance Sheet
Events
The following events occurred
between the balance sheet date and the signing of these financial
statements:
The Company paid an interim
dividend of 2 pence per share equivalent to £1.04 million on 18
March 2024.
The Company issued 8,130,242
shares following the year end. At the date of this report, the
Company had 71,243,862 shares in issue.
The Company has made three
investments since the period end: a £1.015m new investment into
Treefera; a £150k follow-on investment into Tuza (formerly
Statement); and an £804k follow-on investment into Nory.
Alternative Performance
Measures
1. ONGOING CHARGES
RATIO
|
|
29 February
2024
|
|
28 February
2023
|
|
|
£'000
|
|
£'000
|
|
|
|
|
|
Management fee
|
|
1,024
|
|
1,127
|
Other operating expenses
|
|
704
|
|
347
|
Total management fee and other
operating expenses
|
(a)
|
1,728
|
|
1,474
|
Average undiluted net
assets
|
(b)
|
53,551,396
|
|
45,917,974
|
|
|
|
|
|
Ongoing charges ratio % (c = a/b)
|
(c)
|
3.23%
|
|
3.21%
|
The ongoing charges ratio for the
Company for the year to 29 February 2024 was 3.23% (2023: 3.21%).
Total annual running costs are capped at 3.50% of the Company's net
assets. The ratio is calculated by dividing annualised ongoing
charges by the average net asset value in the period.
The annualised ongoing charges
represent the total expense for the year with the exclusion of
performance and arrangement fees payable to Triple Point Investment
Management LLP. No performance or arrangement fees were charged
during the year.
Any excess will be met by Triple
Point by way of a reduction in future management fees.
2. TOTAL
RETURN
|
|
29 February
2024
|
|
28 February
2023
|
|
|
|
|
|
Closing NAV per share
(pence)
|
|
98.55
|
|
102.17
|
Add back dividends paid
(pence)
|
|
11.00
|
|
9.00
|
Adjusted closing NAV
(pence)
|
|
109.55
|
|
111.17
|
Adjusted NAV per share as at the
period end less NAV per share at 28 February 2023 (28 February
2022)
|
(a)
|
(109.55 - 111.17)
|
|
(111.17 - 119.55)
|
NAV per share at 28 February 2023
(28 February 2022)
|
(b)
|
111.17
|
|
119.55
|
|
|
|
|
|
Total return % (c = a/b)
|
(c)
|
(1.46%)
|
|
(7.01%)
|
Shareholder
Information
Board
Jane Owen (Chair)
Sam Smith
Julian Bartlett
Jamie Brooke
Administrator, Company Secretary and Registered
Office:
Hanway Advisory Limited
1 King William Street
London EC4N 7AF
Registered Number
07324448
FCA Registration number
659605
Investment Manager
Triple Point Investment Management
LLP
1 King William Street
London EC4N 7AF
Tel: 020 7201 8989
Independent Auditor
BDO LLP
55 Baker Street
London W1U 7EU
Solicitors
Howard Kennedy LLP
No. 1 London Bridge
London SE1 9BG
Registrars
Computershare Investor Services
plc
The Pavilions
Bridgwater Road
Bristol BS13 8AE
VCT Taxation Advisers
Philip Hare & Associates
LLP
6 Snow Hill
London EC1A 2AY
Bankers
The Royal Bank of Scotland
plc
54 Lime Street
London EC3M 7NQ
Adviser (Venture Investments)
Shoosmiths LLP
1 Bow Churchyard
London EC4M 9DQ
Depositary
Indos Financial Limited
The Scalpel
18th Floor
52 Lime Street
London EC3M 7AF
Financial
Calendar
Key Events
|
|
Date
|
Annual General
Meeting
|
|
23 July 2024
|
Financial half-year
end
|
|
31 August 2024
|
Announcement of half-year
results
|
|
October 2024
|
Financial year
end
|
|
28 February 2025
|